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In-Depth: The No Surprises Act, Second Interim Final Rule

At the Emergency Department Practice Management Association Lobby Day and Strategic Planning session, EDPMA Board members discussed challenges associated with the implementation of the No Surprises Act (NSA) and changes in Medicare Reimbursement.

In this article, I will discuss the NSA.

Background (source)

Thursday, September 30, the Departments of Health & Human Services (HHS) and Labor (DOL), Treasury (“Tri-Departments”), and the Office of Personnel Management (OPM), released a second interim final rule (IFR Part 2) with a comment period implementing provisions of the No Surprises Act (NSA).

IFR Part 2 implements provisions related to the independent dispute resolution (IDR) (Federal IDR) process. Unfortunately, the regulation places a greater emphasis on the “qualifying payment amount” (QPA) – defined as the median in-network rate (determined by the health plan based on their internal data) as of 1/31/2019 inflation adjusted – than it does on other factors that the entities can submit in the IDR process—creating a rebuttable presumption that the QPA is the appropriate out of network (OON) rate.

  • This rule appears to be problematic for clinicians because the certified IDR entity must select the offer closest to the QPA, unless there is credible information submitted by the clinician that clearly demonstrates that the QPA is materially different from the appropriate OON rate.
  • The QPA is determined by the health plan, and most patient encounters will have multiple QPAs at the CPT code level. The QPA is also used to determine the patient cost sharing. These QPAs are specific to the Metropolitan Statistical Area (MSA) for the same/similar services, ensuring that there will be many challenges to billing the patient.
  • Additionally, the rule requires “good faith” cost estimates for uninsured (or self-pay) individuals, expands circumstances for individuals to dispute payment denials, and establishes monthly reporting requirements for certified IDR entities to inform quarterly public reports on payment determinations. The policies in these rules are scheduled to take effective Jan. 1, 2022

Discussions with legislative aides during Lobby Day confirmed that (1) those who labored over two years to secure passage of the NSA were disappointed that the IFR Part 2 did not reflect the intent of the legislation, but (2) did not think that a legislative remedy existed that would pass the House or Senate, and (3) thought that the polarized nature of the political system would negate input to regulators from Republican members of Congress. They acknowledged that a legal remedy, in the form of an injunction, may be the only option left.

Speaking of which…

The Texas Lawsuit (source)

The Texas Medical Association is taking action against a regulation slated to implement the No Surprises Act, a federal surprise billing law taking effect on January 1st.

The Association recently shared that it filed a lawsuit against several federal authorities, including HHS which jointly released the regulation in September. The lawsuit filed on October 28th alleges that the September regulation “undermines Congress’s design” of the independent dispute resolution (IDR) process in the No Surprises Act.

The Texas Medical Association explains in the lawsuit that the No Surprises Act makes it clear that the IDR entity can consider all these factors and more, and that no factor will take priority over another. However, the September regulation says that the IDR entity must weigh the QPA more than other factors, according to the lawsuit.

“Nowhere did Congress specify that the QPA, or any other factor for that matter, should be given primacy over the other enumerated factors,” states the lawsuit. Instead, the flawed rule “will skew IDR results in favor of payers and undermine [physicians’] ability to obtain adequate compensation for their services,” it continues.

The federal authorities also limited providers from voicing their opposition to the IDR process by forgoing a notice and comment period when they released the regulation, the plaintiffs argue.

The Association fears that the IDR process as detailed in the September regulation would incent payers to reduce their provider networks and reduce physician reimbursement rates in order to pay out-of-network providers less for disputed charges under the new law.

Time is of the essence. In a situation where arbitration was impossible (or detrimental) and physician groups and their RCM partners would therefore be obligated to (1) accept the reimbursement rate offered and (2) not be able to balance bill, and (3) not be able to take the case to arbitration in the manner intended by the law.

The problem earned the label “existential”, as those assembled felt that the system as outlined in IFR Part 2 would leave groups and their RCM partners in a situation where there might be insufficient funds earned for services provided to sustain their organizations (particularly in light of the concurrent Medicare reimbursement planned for the coming year, which may amount to a 9.75% decrease.

…and that is a subject for another in-depth article.

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Paul Hudson, FACHE
Chief Operating Officer