Introduction:
The No Surprises Act (NSA) continues to be a newsworthy topic for providers, carriers, and regulatory departments. While the NSA was widely hailed by stakeholders as a welcomed solution to protecting patients from unexpected medical bills, it also introduced a long-overdue mechanism for resolving reimbursement disputes between out-of-network providers and commercial insurance plans through the NSA’s Independent Dispute Resolution (IDR) process. Under the Act, independent certified IDR entities (IDREs) decide payment disputes between providers and carriers for timely filed, eligible claims, removing the often lengthy and uncertain appeal process for these claims.
The Act stands as arguably one of the most substantive pieces of healthcare legislation in recent years, protecting patients from balance bill amounts above a patient’s in-network cost sharing obligation, while seeking to even the playing field between providers and commercial health insurance companies in a fair and impartial manner. Regrettably, the implementation of the NSA has been fraught with operational and legal challenges since the Act went into effect on January 1, 2022. Below is the background and breakdown of some of the latest developments.
Background on Disputed Claims and Arbitration:
According to a report issued by the US Governments Accountability Office (GAO), the Departments significantly underestimated the number of disputes that would be filed. The total number of payment rate disputes forecasted for 2022 was 22,000 but the actual number of disputes filed through June of 2023 was nearly 490,000. The Departments cited, in part, the massive unintended volume coupled with difficulties in determining which disputes were eligible for the NSA IDR process, as the rationale for processing delays. To address the issue, the Departments chose to increase the non-refundable government fee required to initiate the arbitration process. Initially set at $50, the non-refundable administrative fee escalated to $350 in 2023 to recoup the alleged costs of cleaning up the backlog, sparking a legal battle. Healthcare providers argued that the increased fee would hinder their ability to file for arbitration, considering it a financial barrier and in August 2023, a Texas federal court ruled against the administrative fee increase, citing a violation of the Administrative Procedures Act (APA).
Adjustments to Fees:
In response to the court’s decision, the Departments issued a new proposed rule in September 2023, aiming to reset the administrative fee to $150. However, during the subsequent notice and comment period, providers continued to express concerns, asserting that the fee remained prohibitive. The final rule, announced in December 2023 and which went into effect January 22, 2024, reflects a compromise, reducing the administrative fee to $115 per submission. While the $115 fee is an improvement from the initial increase to $350, the fee adjustment still poses challenges for healthcare providers with lower-value claims that cannot otherwise now be batched. This administrative fee is non-refundable in the NSA IDR process.
The Departments have also finalized the range of fees that Independent Dispute Resolution Entities (IDREs) may impose for 2024. For single claim determinations, fees will range from $200 to $840.For batched determinations, fees will range from $268 to $1,173. Notably, these fees are refundable to the party that prevails in the IDR dispute. In addition, the Departments have clarified that for batched submissions exceeding 25-line items, IDREs are allowed to set a fixed additional fee ranging from $75 to $250 for each additional increment of 25-line items. The Departments, in response to calls for stability, have committed to revise both the administrative fee and IDRE fees no more than once annually through notice and comment rulemaking.
Ongoing Rulemaking and Challenges:
The Departments extended the open comment period on the Rules to Monday, February 5, 2024, after receiving 90 comments in the initial public comment period that ended on January 2, 2024. In those comments, healthcare providers commonly recommended greater information and transparency earlier in the claim administration and IDR process and the imposition of penalties when payors fail to promptly respond to open negotiation requests or make payment on an award to the provider within 30 days of the determination date. Health Plans expressed concerns regarding proposed updates requiring plans to submit significantly more information during the initial payment of a claim and during the open negotiation period compared to the current mandate.
The Departments have already initiated rulemaking that proposes further adjustments to the administrative fee structure and batching provisions. If these changes are finalized, an increase in the administrative fee to $150 for disputes initiated on or after January 1, 2025, is on the horizon.
Furthermore, rules concerning the NSA’s Advanced Explanation of Benefits (AEOB) and the Good Faith Estimate (GFE)—provisions that were delayed in early 2022—seem to be on hold indefinitely, contrary to expectations for an AEOB rule to be issued early in 2024.
As for legal challenges, in July of 2023, the United States Department of Justice (DOJ) filed an appellate brief seeking to overturn the decision in the second lawsuit filed by the Texas Medical Association (TMA II). The TMA, on behalf of providers, argued that the Rules prioritized the qualifying payment amount (QPA) over all other factors certified IDREs were to consider when making arbitration decisions. The Court ruled in favor of providers and ordered those related provisions of the August 2022 final rule to be vacated nationwide. Oral arguments in this appeal were held earlier this month and a decision is expected over the next couple of months.
Finally, the US Court of Appeals for the Second Circuit affirmed the dismissal of a New York surgeon’s lawsuit that alleged the Federal No Surprise Act is unconstitutional and asserting it interferes with providers’ rights to sue patients for the full value of emergency medical services. The Court did allow for the plaintiff to seek to amend its complaint to allow for a claim that the NSA violates a provider’s right to challenge reimbursement in Court.
We have filed thousands of NSA arbitrations on behalf of our nationwide clients and remain vigilant in following and assessing the ongoing regulatory changes that affect providers’ rights to dispute under-reimbursements by payors through the NSA IDR process, appeals and otherwise. If your practice is struggling to keep up with these ongoing changes or experiences lack of reimbursement, please call our offices to discuss how we can help in this very complex process.