Updates to the No Surprises Act Expected to Challenge Compliance

Updates to the No Surprises Act Expected to Challenge Compliance

The Act has been subject of two court challenges.

In President Biden’s Feb. 7 State of the Union address, he noted that a million surprise medical bills are prevented every month, as the Administration continues to protect millions of consumers via the No Surprises Act (NSA). As a reminder, the NSA was signed into law in 2020. Most of the law’s provisions took effect at the beginning of 2022, applying to those enrolled in commercial health insurance coverage or group health plans renewing on or after Jan. 1, 2022.

Also related to the No Surprises Act, on Feb. 6, 2023, a U.S. District Court in Texas granted the Texas Medical Association’s (TMA’s) Motion for Summary Judgment in a second NSA lawsuit focused on consideration of the Qualifying Payment Amount (QPA) during the independent dispute resolution (IDR) process – this is TMA’s second victory on the issue.

The Court found in favor of healthcare providers that asked for changes in the arbitration methodology – which is the IDR process. Matthew Albright, Zelis’s Chief Legislative Affairs Officer, issued a recent report that detailed how the Court’s decision targeted how much weight an arbitrator should give the QPA when deciding what a health plan’s reimbursement to an out-of-network provider should be.

Now, the QPA is basically the median rate paid to in-network providers. In its order, the Court stated that the NSA final rule “continues to place a thumb on the scale for the QPA.” 

There are three major consequences of the Texas decision.

First, when arbitrator deliberates, there is no longer a requirement that the QPA be looked at first or weighed more heavily than other qualitative considerations, like acuity of the patient or the level of training of the provider. In fact, individual arbitrators will now be at liberty to attach any weight they choose to the QPA or to those other qualitative considerations.  

Second, arbitrators no longer need to presume that the QPA is credible. This means that providers can now question the credibility of the QPA. 

Third, arbitrators will no longer have to explain why they chose a reimbursement amount other than the QPA.

Because the Court’s summary judgment further diminishes the importance of the QPA in an arbitrator’s decision, individual arbitrators will likely now make varying, inconsistent, and, frankly, subjective decisions about out-of-network reimbursement. This may be a win for some providers, more of whom may be incentivized to initiate arbitration, but it also creates a dispute resolution process that basically has no consistent methodology or oversight when it comes to deciding an appropriate out-of-network rate.

Next, the Council for Affordable Quality Healthcare (CAQH) has released its 2022 Index, which measures the industry’s use – and the cost savings – of administrative electronic transactions such as the 835 (electronic remittance advice) and Electronic Fund Transfers (EFT) via Automated Clearing House (ACH). Utilization of EFT ACH actually decreased to 75 percent in 2022 for medical providers, by a percentage point (and costs increased for the manual work behind managing paper checks), while the dental industry’s adoption of this payment option increased by a percentage point, to 25 percent.

In contrast, both the medical and dental industry’s increased 835 usage, and the related cost savings, also increased. Specifically, 835 usage in the medical industry jumped from 64 percent in 2021 to 83 percent in 2022.

The CAQH study estimates that there is still a $2.6 billion savings opportunity annually for 835 usage if we can get the remainder of medical and dental providers to adopt it, and a $1.4 billion savings opportunity annually for the EFT ACH.


Related Stories

Leave a Reply

Your Name(Required)
Your Email(Required)

Featured Webcasts

Implantable Medical Device Credit Reporting for 2023 – What You Need to Know

Learn how to save your facility hundreds of thousands of dollars in repayments and fines by correctly following CMS requirements for implantable medical device credit reporting. We provide you with all the need-to-know protocols, along with the steps for correct compliance while offering best practices to implement a viable strategy in your facility.

January 25, 2023

Trending News