The importance of the No Surprises Act (NSA) cannot be overstated, as surprise medical bills have long been burdensome for patients in the U.S. healthcare system. In fact, more than half of all U.S. consumers have received an unexpectedly large medical bills.
The purpose of the No Surprises Act is to prevent surprise out-of-network bills, often for emergency services. For example, if your appendix bursts while at work, you would be rushed to the nearest hospital for an emergency appendectomy. Yet, even if the hospital is in your insurance network, if the surgeon or anesthesiologist who performs the surgery happens to be out of network, you could receive a medical bill of $35,000 or more, even though you have great health insurance.
Another indication that this legislation was sorely needed was the bipartisan support to address surprise bills. In the political climate of the last several years, we aren’t seeing this type of agreement on issues from both parties. Since the act went into effect on Jan. 1, 2022, there will still be a lot to monitor later this year, including a recent Texas court ruling that focuses specifically on the Independent Dispute Resolution (IDR) provision of the act.
Texas Ruling
Although both sides of the political aisle are in support of eliminating surprise medical bills, there is still some disagreement from provider organizations and payers about what the implementation of the No Surprises Act will look like. In fall 2021, several provider groups, including the Texas Medical Association, filed lawsuits challenging the IDR process, or the process for handling payment disputes between providers and payers for out-of-network charges. Essentially, if the provider and payer cannot come to a decision, the act states that an arbitrator would act as a third party and use the Qualifying Payment Amount (QPA), or the health plan’s average in-network rate, to make a final decision about payment.
Provider groups took action against this IDR process, and in February, Judge Jeremy D. Kernodle, a federal judge in the eastern district of Texas, sided with the Texas Medical Association and agreed to repeal key aspects of the legislation.
As a result, the Centers for Medicare and Medicaid Services (CMS) has since issued new guidance regarding the IDR process for disputing parties. In addition to the QPA, providers can now submit other items for the arbitrator to consider. For example, factors such as the level of training, experience, market share, and quality and outcomes measurements of the provider/facility can now be taken into consideration by the arbitrator during payment disputes.
Implications for Payers, Providers, and Patients
It is important to recognize that only the IDR process and its emphasis on the Qualifying Payment Amount is impacted by this ruling. It is business as usual for all other components of the No Surprises Act. As such, this is not going to negatively affect patients and does not affect the patient-provider dispute resolution process outlined in the NSA.
For providers, this is a definite win, since they are concerned that the QPA does not consider other relevant factors and heavily skews the IDR process in favor of insurers. Or, as the judge explained, the NSA “places its thumb on the scale for the QPA.”
This means that both providers and payers must educate themselves on the changes in the IDR process, revise their policies and procedures accordingly, and educate the appropriate staff. They will also need to keep an eye on the additional lawsuits from organizations such as the American Medical Association and American Hospital Association regarding the IDR process.
Looking Ahead
This is just the start of additional litigation we are likely to see regarding the IDR process and the weight that it places on the QPA. In addition to these pre-existing lawsuits, the Department of Health and Human Services officially filed an appeal of the Texas court’s decision. Since then, its request that the court pauses its appeal until the final surprise billing rule is announced this summer has been granted. The exact fate of the NSA implementation remains unclear and is likely to continue to evolve during the coming months. Both payers and providers will need to be prepared to adapt and pivot accordingly to uphold the regulations and protect those who matter most – the patients.
About Lynne Rinehimer
Lynne Rinehimer, Esq. has worked in health care compliance and consulting for 24 years. Lynne is a GRC Sales Engineer and Compliance subject matter expert for symplr. Her role involves managing the written regulatory content for the Risk Assessment module of the symplr Compliance product which provides clients with libraries of healthcare regulatory question sets so that they can administer their risk assessment programs. She has worked as a healthcare consultant, conducting compliance risk assessments and drafting Compliance Programs for various healthcare organizations. Lynne is a graduate of the University of Maryland and Villanova University School of Law and is a member of the Pennsylvania Bar Association.
