Feds propose rule changes for No Surprises Act

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Federal policy makers aim to revise the billing dispute resolution process in the No Surprises Act (NSA).

The administration of President Joe Biden and the U.S. Departments of Health and Human Services (HHS), Labor, and Treasury, and the U.S. Centers for Medicare & Medicaid Services (CMS) announced a draft rule to change the independent dispute resolution (IDR) process.

The administration remains committed to protecting consumers from surprise billing for health care. The revised rule would take patients out of the middle of billing disputes between health insurance companies and providers, HHS Secretary Xavier Becerra said in a news release.

“Eliminating surprise medical bills, reducing the burden of medical debt, and curtailing junk insurance plans continue to be high priorities,” he said. “HHS will continue to do everything in our power to protect patients.”

CMS proposals

CMS said, if finalized, the proposed rule:

• Would improve communications between payers, providers, and certified IDR entities who make payment determinations. Payers would have to supply more information about payments or denials and would use standardized codes to indicate if a claim is subject to the NSA surprise billing rules.
• Adjust Federal IDR timelines. A 30-day open negotiation period would begin on the date a disputing party notifies the other party and the government departments via the federal IDR portal. The change would create more certainty about the open negotiation period occurring.
• Establish new batching criteria to include multiple items or services in a single dispute. That would improve efficiency and minimize costs for disputing parties.
• Change the administrative fee structure to improve accessibility of the process. Both parties in a dispute pay nonrefundable administrative fees so the IDR process is self-sustaining. Fees for low-dollar disputes would be reduced to promote equitable access to the IDR process.

The proposed rule “will strengthen the communication between health care payers and providers and improve upon the independent dispute resolution process,” CMS Administrator Chiquita Brooks-LaSure said in the news release. CMS also has published a fact sheet about the proposed changes.

Court challenges

The federal leaders’ announcement did not refer to court fights over the No Surprises Act, but the legal language of the proposed rule does. The Texas Medical Association (TMA) claimed victory in four federal lawsuits contesting various elements in the NSA.

For example, TMA opposed a 600% price hike – from $50 to $350 – in the administrative fee to begin IDR. TMA also opposed narrow batching provisions that the physicians said were authorized by Congress to encourage efficiency and minimize costs. TMA won that court case.

In another case, TMA argued the federal rules weigh in favor of health insurance companies and were unfair to physicians, because the federal rules allowed insurance companies to deflate qualifying payment amounts to physicians.

For example, the physicians argued health insurers could use lower, out-of-specialty rates to calculate the qualifying payment amounts. Citing the court ruling, TMA noted the judge agreed, stating the NSA calculations “favor insurers at the expense of plaintiff providers.”

Ultimately, that robs patients of access to physicians’ care, TMA President Rick Snyder, MD, said in a news release.

TMA opposed some NSA disclosure requirements that were upheld by the court. Even so, the physicians were pleased with the overall outcome, Snyder said.

“The federal agencies have work to do to revise their regulations to come into compliance with the court’s decision,” Snyder said. “TMA will remain vigilant to ensure that the federal agencies implement the No Surprises Act in a manner that is lawful and preserves patient access to care.”

AHA responds

Potential increases for IDR fees already spurred opposition by the American Hospital Association (AHA), which published its own summary of the changes.

The association endorsed using the Administrative Procedure Act process to establish fees, but opposes increases and using inflationary adjustments to calculate future increases.

“AHA also (raises) concerns with the methodology for determining the administrative fee and opposes giving IDR entities more flexibility in setting their fees,” an AHA statement said. “Specifically, with regard to an IDR entity using a tiered pricing approach for batched determinations, the AHA recommends that a single hospital claim with multiple lines should be exempt from the tiered batched pricing and charged a fixed fee.”