Concerns About the Federal No Surprises Act: Interim Final Rules
According to an article published by KHN, the federal agencies responsible for issuing the regulations for the implementation of “the No Surprises Act” (NSA) have publicly acknowledged that the concerns raised by legislators, providers and medical associations over the federal legislation have been heard.
However, according to the Secretary of Health & Human Services (HHS), Xavier Becerra, “health care access will not be diminished,” addressing one of the concerns raised by the parties in opposition of the rules. Instead, he suggests that a “competitive, market-driven process will find a balance, especially when consumers know better what they are paying for,” while he also encourages providers to get in line or go out of business.
The remarks from the Secretary are made despite two substantive complaints filed over the last several weeks:
- Association of Air Medical Services v. U.S. Department of Health & Human Services, et al., Case No. 1:21-cv-03031-RJL
- Texas Medical Association, et al. v. United States Department of Health and Human Services, et al., Case No. 6:21-cv-00425-JDK (an expedited briefing schedule in the Texas complaint was issued, with the expectation to resolve the matter prior to the first expected request for arbitration in March, 2022);
And two letters to the Biden Administration, one from the House of Representatives with more than 150 signatories (from both parties) and one from more than 100 medical societies and associations:
- House of Representatives Letter to the Biden Administration, November 5, 2021
- American Medical Association, State Specific Associations and National Medical Specialty Societies Letter to the Biden Administration, November 17, 2021
NSA Interim Final Rule Part II
The concerns being raised relate to the Interim Final Rule (IFR), “Requirements Related to Surprise Billing; Part II,” which directs Independent Dispute Resolution (IDR) entities to consider the qualifying payment amount (QPA) as the presumptive reasonable payment for disputed out-of-network claims and specifically instructs IDR entities to consider the offer closest to the QPA as the appropriate payment amount.
While there is ubiquitous support for the No Surprises Act and the need to protect patients from surprise medical bills, these actions are calling for the federal agencies to reconsider or revise the IFR Part II, as it is not consistent with the legislative intent of the Act and does not present a “balanced process to settle payment disputes”.
The current interim QPA rule could hinder the ability of providers to negotiate payments during the “open negotiations” period, prior to arbitration being initiated, as health insurers will know that the median in-network contracted rate (QPA) for a specific CPT code in a specific geographic region will essentially be the predetermined payment. Furthermore, it could impact the ability of providers to negotiate/renegotiate in-network contracted rates under the QPA’s cap. Narrowing of networks, jeopardizing access to care and adversely impacting good faith negotiations are some of the unintended consequences that could arise under the rule. In response to these concerns, Becerra noted that providers can challenge the QPA under the rule by showing the “evidence”, further stating “It has to be relevant, material evidence. And let the best person win in that fight in arbitration”.
Following the IDR Process for Payment
Congress passed the No Surprises Act following a comprehensive process that ultimately rejected a benchmark rate for disputed claims and instead enacted a statute that allows payors and providers to submit relevant and credible information through the IDR process that substantiates their respective payment offers (excluding billed charges and public payor information):
- Median in-network rates
- Provider training and quality of outcomes
- Market share of parties
- Patient acuity or complexity of services
- Facility providers: teaching status, case mix and scope of services
- Demonstrations of good faith efforts to negotiate in-network rates
- Prior contract history between the two parties over 4 years
Contact Us for Help Navigating the No Surprises Act
The statute expressly directs the IDR entities to consider each of these factors, without using any single one as the default for determining payment, hence the urging by a wide array of interested parties for regulators to reconsider the rule as the QPA in essence is a benchmark rate. For now, providers need to prepare for how the QPA and rules are written. Cohen Howard is working with clients to put in place the necessary tools for success under the NSA and to present the ‘best evidence’ during the negotiation process and in comprehensive arbitration filings for overcoming the presumed QPA rate.
We will continue to follow the legal challenges to the No Surprises Act and any related outcomes in the weeks and months ahead while preparing for the changes that will be forthcoming beginning January 1, 2022.
