HaloMD lobbyist defends No Surprises Act impact amid criticism of company and analysis

Patrick Velliky, the top lobbyist for billing intermediary HaloMD, defended his study claiming the No Surprises Act (NSA) has cut out-of-network emergency spending by billions. Critics accuse the study of using flawed assumptions and ignoring high-payout specialties like neurology, which can reach 2,400% of in-network rates. While insurers accuse HaloMD of exploiting the dispute resolution process, Velliky argues the firm serves as a vital hedge against insurer consolidation for small medical groups.

HaloMD IDR business model

• ▪HaloMD generates a success rate above 90% and secures median payouts more than nine times higher than in-network rates for its clients.
• ▪HaloMD was established in 2022 to assist healthcare providers in submitting and winning out-of-network reimbursement disputes under the No Surprises Act.
• ▪HaloMD initiates approximately 21% of annual disputes in the federal independent dispute resolution process.
• ▪HaloMD represents more than 150 U.S. medical groups, with 80% of its clients being mid-sized to small independent medical groups.
• ▪HaloMD operates on a business model where it earns a percentage of the net payment awards it secures for healthcare providers.

No Surprises Act costs

• ▪Research from Georgetown University estimates that the federal independent dispute resolution process created over $22 billion in costs over four years.
• ▪Out-of-network surgeries and neurology services in the independent dispute resolution process are paid at 1,355% and 2,400% of the qualifying payment amount, respectively.
• ▪Healthcare providers prevail in more than 80% of federal independent dispute resolution cases, winning awards well above in-network rates.

Velliky study methodology

• ▪Patrick Velliky's study used the qualifying payment amount, representing in-network rates, as a proxy for out-of-network reimbursement outside of arbitration.
• ▪HaloMD lobbyist Patrick Velliky authored a study estimating that the No Surprises Act cut out-of-network emergency medicine spending by billions of dollars.
• ▪Patrick Velliky's study excluded administrative and arbitration fees, which other research indicates drive billions of dollars in healthcare spending.
• ▪Patrick Velliky's study focused exclusively on emergency medicine and excluded specialties with higher independent dispute resolution payouts, such as surgeries and neurology.

Study criticism responses

• ▪Patrick Velliky justified excluding administrative fees from his study by arguing they are avoidable if insurers contract at rates lower than pre-law levels.
• ▪Patrick Velliky argued that existing research on the No Surprises Act lacks a baseline comparator of what claims would cost without the law.
• ▪Patrick Velliky defended his study's assumptions by stating that publicly available, verifiable data on out-of-network claims reimbursed outside of arbitration does not exist.
• ▪HaloMD is collaborating with a third-party research firm to recreate Patrick Velliky's study using proprietary client data to reduce assumptions.

Provider-insurer IDR disputes

• ▪HaloMD selects independent dispute resolution arbiters using autonomous criteria, including fee refund processing speed, eligibility determination accuracy, and win rates.
• ▪Multiple insurers have sued HaloMD, alleging the company exploits the independent dispute resolution process by submitting ineligible disputes and using deceptive letters.
• ▪Patrick Velliky accused insurers of frequently making incorrect eligibility determinations and attempting to calculate qualifying payment amounts as low as possible.

IDR reform proposals

• ▪Patrick Velliky recommended that the Centers for Medicare & Medicaid Services investigate whether arbiters rule in favor of providers to secure more business.
• ▪Patrick Velliky proposed that regulators focus on auditing outlier arbitration decisions rather than overhauling the entire independent dispute resolution process.
• ▪Patrick Velliky suggested delinking arbiter payments from eligibility decisions to eliminate perverse financial incentives for Independent Dispute Resolution Entities.

Debatable claims

• ▪The No Surprises Act's arbitration process increases overall healthcare spending
• ▪HaloMD exploits the federal independent dispute resolution process