Radiologists ‘especially successful’ in surprise-billing disputes, notching payments 500% above QPA

Radiologists have been “especially successful” in surprise-billing disputes, notching a median prevailing offer about 500% higher than the qualifying payment amount, according to new research published in Health Affairs [1].

Surgeons and neurologists fared even better in contested cases logged over the last two quarters of 2023, scoring prevailing offers at 800% or more of the QPA. In contrast, hospitals prevailed less frequently than physicians, with their winning offers at a lower level (no higher than 250% of QPA in 2023).

“The evidence to date suggests that strategies of using [independent dispute resolution] are not uniform across the provider community,” lead author Jack Hoadley, PhD, a health policy expert at Georgetown University, and colleagues wrote Aug. 19. “System use is dominated by a handful of organizations, especially those backed by private equity. There is little evidence that rank-and-file emergency physicians, radiologists and anesthesiologists are using the system.”

The No Surprises Act first went into effect Jan. 1, 2022, aiming to protect healthcare consumers from receiving unexpected bills for out-of-network care. For the study, Hoadley et al. analyzed data from 2023, determining implications for the future of independent dispute resolution, a process used to settle payment quarrels between physicians and insurers. Such negotiations start with the qualifying payment amount, which determines cost sharing for services included in the NSA’s balance-billing protections.

There were over 657,000 newly initiated cases filed in 2023, about 70% of which came from four private equity-backed organizations. Those included Radiology Partners (the country’s largest imaging practice, supported by Starr Investment Holdings and New Enterprise Associates) and Envision Healthcare (a large multispecialty group previously backed by KKR that provides radiology and other services). Team Health (backed by the Blackstone Group) and SCP Health (Onex), revenue cycle management companies that work with affiliated physician groups to file IDR cases and maximize revenues, were the other two leaders. About half of all newly filed cases last year were in Texas, Florida, Tennessee and Georgia—all states with a presence from the four companies.

Team Health and Singleton Associates (a Rad Partners affiliate) were among the most successful in these challenges. Both won over 90% of their cases during the final three quarters of 2023. Team Health typically won an amount double the qualifying payment amount, while Singleton Associates’ victories were nearly five times the QPA in the first quarter and eight times for the rest of 2023.

“Overall, radiology providers using the IDR system were especially successful,” the authors reported.

Singleton Associates is at the heart of a lawsuit filed by health insurer UnitedHealthcare against Rad Partners in April 2023. UHC had claimed RP perpetrated a “pass-through billing scheme,” using favorable terms of the Houston group’s contract and charging for services across the RP enterprise through it. Rad Partners won a key victory in October, with an arbitration panel awarding it $153.5 million in the underpayment dispute. However, UHC has appealed, with no public pronouncements on the matter since.

The practice shared a statement in response to the Health Affairs study Friday.

“The data from 2023 demonstrate that insurers continue to abuse the No Surprises Act by pushing medical practices out of network, then underpaying healthcare providers and failing to resolve the problem during mandated negotiations,” Rad Partners told Radiology Business. “As highlighted in the New York Times, due to the shared savings scheme, insurers administering self-funded health plans can have a financial incentive to direct physician groups out of network. We are pleased that Congress is interested in investigating this abusive practice.”

For Hoadley and co-authors, the biggest open question is why the data demonstrate such high provider win rates. The No Surprises Act has no requirement for arbitrators to report reasons for payment determinations.

“Some observers have speculated that contracted rates for [out-of-network] providers when they were previously in network—a factor explicitly identified in statute—may play a key role in the high provider win rates, in some cases,” the authors concluded. “Others have suggested that rates previously paid for OON services may be influential, even though it is not one of the NSA’s specified factors. Still others have wondered whether physicians are more aggressive than insurers in making their cases to the IDR entities. Ideally, more information is needed on the types of evidence being submitted to the IDR entities by providers and plans and on the reasons given by IDR entities for their decisions.”

AHIP promoted the Arnold Ventures-supported study's results on Aug. 26. The nation's largest health insurer lobbying group contends that private equity-backed physician groups are "overwhelming the arbitration process intended to resolve surprise billing disputes.” This has resulted in them “extracting payments that are higher than what they’d ordinarily be able to negotiate.” (Physicians have contended that prevailing offers are so much higher because insurer-calculated QPAs are artificially low.)

“Private equity’s short term business model presents ongoing challenges to health care affordability. Surprise billing reform was created to help patients, not private equity,” AHIP said in a update shared Monday.

The Health Affairs study came the day before the Centers for Medicare & Medicaid Services released new data on the NSA. As of June 30, the agency had received over 16,000 complaints and resolved 12,700. CMS reported more than $4 million in restitution for these closed cases. Top complaints against health plan insurers included noncompliance with QPA requirements, late payment after disputes were resolved, and failure to conform with requirements to issue payments or notice of denial within 30 days.

“Our members continually provide evidence of noncompliance and delayed payments on the part of plans. This results in significantly increased provider burden that disproportionately impacts radiology,” Linda Wilgus, MBA, co-executive director of the Radiology Business Management Association, said in a statement responding to the CMS report. “We are encouraged that CMS is taking an active approach to investigating these complaints, which has resulted in over $4 million in restitution.”

Editor's Note: This story has been updated to include a comment from AHIP.