On Friday, August 19, 2022, the U.S. Department of Labor and related Federal regulatory agencies issued final No Surprises Act rules “only for certain issues critical to the implementation and effective operation of the Federal IDR process”. These final rules were in response to the previously reported Texas Medical Association and LifeNet court decisions1 and comments received from interested parties since the interim rules were first issued. Specifically, the final rules address the following:
- Disclosure of additional information on the EOB about the QPA to address payor’s down coding, defined generally to mean both a change by the payor in the service code billed or use of modifiers in lowering the QPA,
- Consideration of the QPA together with all the permissible factors when making a payment determination by the certified IDR entity under the Federal IDR process, and,
- Requirements related to a certified IDR entity’s written decision.
Importantly, the final rules under the No Surprises Act have changed how an IDR entity is to determine which of the two offers to accept in the arbitration. Previously, the IDR entity was generally required to select the offer closest to the QPA, unless credible evidence was presented to demonstrate the QPA was materially different from the appropriate out-of-network rate. This led many in the industry, particularly providers, to object to the IDR process maintaining the process was stacked in favor of health plans and payors and led to the Texas Court vacating this part of the rules under the NSA.
Under the final rules, the IDR entity is now required to select the offer that “best represents the value of the item or service”. The IDR entity must now consider the QPA and other credible evidence submitted and issue a written explanation of its determination, including what information the IDR entity determined demonstrated that the offer selected as the out-of-network rate is the offer that best represents the value of the item or service, including the weight given to the QPA and any other credible evidence submitted. This change is significant as it now places the QPA and credible evidence on a more level playing field.
Lastly, the final rules make clear that if the QPA already accounts for the credible evidence submitted, the IDR entity should not consider it to avoid double counting. For example, if the level of patient acuity is already reflected in the QPA service code, the patient’s acuity should not be separately considered unless in instances where “the complexity of a case is an outlier such that the time or intensity of care exceeds what is typical for a service code”. It will be important for practices to demonstrate, in sufficient detail, why the out-of-network provider’s level of skill is required for treatment.
These final rules go into effect in approximately 60 days. The Departments have indicated that they intend to issue additional final rules in the future regarding other aspects of the No Surprises Act. We will continue to keep providers informed as new guidance is issued.
If you are interested in speaking further about these final rules or learning how Cohen Howard can assist your practice in managing these claims, please feel free to reach out to our office.