On February 23, 2022, a Federal Court in Texas issued a decision and final judgment that certain parts of the Interim Final Rules Part II (“Rules”) adopted under the No Surprises Act (“NSA”) are invalid. Specifically, the Judge held that the “presumption” that the Qualifying Payment Amount (QPA) is the appropriate out-of-network rate, unless credible evidence is provided proving otherwise under the independent dispute resolution (IDR) process, conflicted with the unambiguous terms of the No Surprises Act and he invalidated that portion of the Rule on a nationwide basis. The Court instead held that the QPA is just one of several factors to consider in resolving a billing dispute between out-of-network providers and payors under the NSA. The Court also held that the government had failed to adopt the Rules in accordance with allowing for a proper notice and comment process as required by statute.
In recognizing that the QPA presumption in the Rule exceeded the statutory language in the NSA, the Court stated “…the Rule treats the QPA, an insurer determined number, as the default payment amount and imposes on any provider attempting to show otherwise a heightened burden of proof that appears nowhere in the statute” and that the Rule “rewrites clear statutory terms”.
Based on these findings, the Court eliminated that QPA presumption portion of the Rule from being implemented. As a result, the IDR process is now a baseball style arbitration and the QPA is just one of several factors to be considered by arbitrators in the IDR process, not the presumptive factor. Other factors, in part, include the level of training and experience of the provider, the market share for the same or similar services held by the provider in the geographic region where the services were administered, the acuity level of the patient, the complexity of the case and other relevant information provided as part of the IDR process.
This is a significant victory for the out-of-network provider community and allows for a more level playing field in the NSA IDR arbitration process which remains in place under the NSA. The Court’s decision did not impact any portion on the prohibition of balance billing patients in excess of in-network cost sharing for covered services under the NSA as mandated by the NSA.
The are several other lawsuits pending in Federal courts raising similar issues on the QPA presumption, the IDR process and the constitutionality of the statute itself that have yet to be determined. Further, the defendants in this action, being the various regulatory departments under the Biden administration, have not yet indicated whether they plan to appeal this decision and/or rewrite the Rule prior to final adoption. As a result, it is not clear at this time whether this decision will be final or subject to further challenge or conflicting decisions. Cohen Howard will continue to report any updates on these matters as developments occur.