House members urge changes to No Surprises Act final rule

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Leaders of the House Ways and Means Committee have sent a letter to several federal agencies saying the final rule implementing the No Surprises Act favors insurers and should be changed to reflect provider concerns.

The law, which bans surprise medical bills, sees payers and providers entering into a third-party arbitration process to settle disputes regarding out-of-network charges. The final rules specify that certified independent dispute resolution (IDR) entities should select the offer that best represents the value of the item or service under dispute after considering the Qualified Payment Amount (QPA) and all permissible information submitted by the parties. 

The lawmakers argue the rule favors insurers in the IDR process.

“Although the qualifying payment amount is an important factor, the statute lists the QPA as one of many factors an IDR entity must consider without giving preference or outsized weight to any one factor,” they wrote.

Citing a prior federal district court decision findings flaws in the implementation of IDR requirements, the House members said that while the final rule makes some limited progress by no longer designating a “rebuttable presumption” towards the QPA as did the interim final rule,  the new instruction to IDR entities largely would have the same effect.

“In the new final rule, the Departments created a new ‘double counting’ test that has no basis in the statutory text, directing IDR entities to ‘consider whether the additional information is already accounted for in the QPA,'” lawmakers wrote. “Further, the rule states that the IDR entities ‘should not give weight to information related to a factor if the certified IDR entity determines the information was already accounted for in the calculation of the QPA.'”

They maintained this perpetuates the flaws of the interim final rules and skews the determination of the IDR process toward the QPA. The final rule, they said, precludes IDR entities from giving weight to factors like patient acuity and the complexity of furnishing the item or service at issue – unless providers meet the “heightened burden” of disproving double-counting within the QPA.

WHAT’S THE IMPACT

The market share of the entities in question, lawmakers said, may be a significant factor that should inform the IDR entity’s decision, but it may also be a variable in the calculation of the QPA and could fail the “double counting” test. 

“Disregarding this factor because of the ‘double counting’ test goes against the law’s intent for IDR entities to correct monopolistic pricing by either party,” House members wrote.

They also expressed their concerns regarding what they perceive as the slow implementation of the Advanced Explanation of Benefits (AEOB) provision included in the No Surprises Act. The law instructed the departments to finalize rulemaking to implement the AEOB by plan years beginning on or after January 1, 2022. Despite this mandate, the departments only recently issued a request for information regarding the AEOB’s implementation on September 16, 2022 – a full eight months after the provision should have been in effect.

“We are concerned that now, implementation will be delayed further into 2024 at the earliest,” they said. “Patients deserve access to the unprecedented and revolutionary transparency the No Surprises Act provided.”

THE LARGER TREND

In September, the American Hospital Association and American Medical Association moved to dismiss their challenge to the federal government’s September 2021 interim final rule governing the No Surprises Act’s independent dispute resolution process. However, the groups said they intended to “make our voices heard in the courts very soon” about continued problems with both the interim and final rules.

The final rule continues to favor insurers and does not line up with what Congress intended when it passed the law, the groups said.  

The lawsuit filed in December 2021 did not seek to prevent the No Surprises Act core patient protections from moving forward. It sought to force the administration to alter regulations over dispute negotiations between provider and payer. The groups said the lawsuit became moot when the administration released a revised final rule on the independent dispute resolution process this August.

On December 27, 2020, the Consolidated Appropriations Act, which includes the No Surprises Act, was enacted to give protections against surprise billing by limiting out-of-network cost-sharing and by prohibiting balance-billing.

Most patients get a surprise bill for unknowingly seeing an out-of-network provider, such as in the emergency room or from a clinical lab. The No Surprises Act protects patients by taking them out of the middle of disputes over out-of-network payment rates between providers and payers.

In October, the AHA and American Medical Association filed a friend-of-the-court brief in support of a Texas Medical Association lawsuit claiming the revised independent dispute resolution process for determining payment for out-of-network services under the No Surprises Act skews the arbitration results in commercial insurers’ favor in ways that violate the compromise Congress reached in the Act.
 

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