No Surprises Act Surprises No One

Although the Biden Administration claims this is the final regulation, there is evidence more is yet to come.

The Biden administration released the final No Surprises Act regulation recently but advised healthcare professionals that this final version is not the final one and promised more to come. The latest final rule was narrowly focused on just the arbitration process between payers and providers who might disagree with a reimbursement for a No Surprises Act out-of-network claim.

That arbitration process is called the Independent Dispute Resolution process, or IDR, and, how the reimbursement is decided in the IDR process and how that might have significant consequences not just on all out-of-network claims, but also on provider contracts and on healthcare reimbursement more generally.

The final rule recently released, concerns itself with only three issues. One, wow should the arbitrators or IDR entities determine the best reimbursement for No Surprises Act claims? Two, what should the written decisions from those IDR entities say? Three, what needs to happen if a payer downcodes a submitted claim to lower payment to the provider?

First, under last year’s No Surprises Act final rule, IDR entities were to assume or presume that the plan’s median in-network rate was the appropriate or default rate, and providers would have to bring substantive evidence that they deserved anything more than the median in-network rate.

A Texas District Court threw that methodology out this past February and, now, the final rule is aligned with the Texas court’s decision.  The rule now says that all factors — seven in all — need to be considered and that the IDR entity should choose the reimbursement that best reflects the value of the healthcare service.

Now, there were seven lawsuits brought by providers on precisely this issue; those lawsuits were put on hold, pending this rule. Ostensibly, then, with the release of this rule, the providers have won, and the American Hospital Association and others will drop those lawsuits.  

However, the administration is now requiring that the IDR entities consider the plan’s median network rate first, before looking at other factors, when considering appropriate reimbursement. In other words, the implication is that, although the median in network rate won’t be the default rate, there is the implication that all other factors will be weighed against the median in-network rate which serves as a kind of benchmark. So, we’ll have to see if the lawsuits are dropped or not.

Second issue in the final rule: It broadened the information that should be in the IDR Entity’s written decisions for every IDR determination, including what weight was given to the plan’s median in-network rate. In other words, here’s that car dealer asking why you didn’t like the first car.

The third issue in the rule focused on downcoding, which was defined as payers changing the service code or modifiers when initially paying a No Surprises Act claim.

The latest rule requires plan to notify providers that they are downcoding and include both the reason for that downcoding and what the median in-network rate would have been if they hadn’t downcoded.

For additional information, please refer to the links below.

• The final rule can be found here: https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/no-surprises-act

• Fact Sheet about the final rule: Look on page 3 for a good summary of the new downcoding requirements and the IDR methodology. https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/requirements-related-to-surprise-billing-final-rules-2022.pdf

• New FAQs on the IDR process: https://www.cms.gov/files/document/faqs-part-55.pdf

• https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/federal-independent-dispute-resolution-process-status-update.pdf

• More guidance on common mistakes and helpful tips for parties involved in an IDR dispute can be found here: https://www.cms.gov/nosurprises/help-resolve-payment-disputes/Tips-for-Disputing-Parties

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