Weight-Scale
The independent dispute resolution process under the federal No Surprises Act continues to generate legal action as well as a growing backlog of cases. Earlier this week, Premera Blue Cross of Mountlake Terrace, Wash., alleged in a lawsuit filed in Seattle that a weight-loss clinic abused the process to obtain inflated payments from the insurer.
Transform Weight Loss operates ambulatory surgery centers in Washington. Premera alleges that the out-of-network provider falsely claimed in filings with the Centers for Medicare & Medicaid that its services qualified for independent resolution. It then submitted payment offers that exceeded in-network rates by more than 1,000%. As a result, Premera said it was forced to participate in the process, pay a non-refundable $115 administrative fee for each dispute and devote staff resources to handle claims despite knowing they were not valid.
In addition, Premera said that because independent dispute resolution entities are compensated only when they issue a final award, they have a financial incentive to overlook eligibility objections and proceed to payment determinations. Transform Weight Loss continued filing dispute claims even after being notified that their conduct was improper and told to stop, Premera said. Premera is asking the court to:
- Declare any determinations obtained by Transform invalid;
- Ban the defendants from filing future dispute resolution proceedings for services provided at out-of-network facilities;
- Bar Transform Weight Loss from trying to enforce existing awards; and
- Pay treble damages under Washington state consumer protection law.
If left unchecked, the defendants' conduct would "deplete funds set aside for covering health care for citizens of Washington, incentivize copycat behavior by other out-of-network providers and make it more difficult for insurers to build networks with providers," Premera said in the complaint.
This is only the latest disagreement involving the independent dispute resolution process since it took effect more than three years ago. Along with the backlog of claims, providers have won around 80% of arbitration cases. Median payments have been 3.72 times the qualifying payment amount, twice the actual median local in-network rates and 4.5 times as much as Medicare rates.
Premera Bue Cross, an independent licensee of the Blue Cross Blue Shield Association, provides health insurance and related services to approximately two million people. It has operated in Washington since 1945 and in Alaska since 1957.
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