Recent court rulings have created uncertainty around the federal independent dispute resolution (IDR) process of the No Surprises Act (NSA). These rulings, involving cases like Texas Medical Association v. HHS, have temporarily suspended IDR operations, affecting administrative fees and claims batching. Despite this setback, healthcare providers may benefit from reduced administrative fees and clarified IDR rules, while awaiting further guidance. Providers should remain vigilant about lingering issues, monitor updates, and adapt their strategies as the federal IDR process undergoes potential changes.
Recent court rulings have once again cast uncertainty over the federal independent dispute resolution (IDR) process of the No Surprises Act (NSA). The Centers for Medicare & Medicaid Services (CMS) made an announcement on August 25th, reiterating the suspension of all federal IDR process operations, which had initially been halted on August 3rd following a court ruling that vacated certain provisions related to claims batching and administrative fees. Although certified IDR entities had resumed processing some batched disputes five days later, a more recent court decision, this time related to the calculation of the qualifying payment amount (QPA), led to the suspension of all previously resumed operations.
So, what do these court rulings signify for the federal IDR process, and what implications do they carry for the future of the NSA? In this article, we will delve into the key takeaways from these legal challenges and explore what lies ahead for this process.
Legal Cases at the Core of the Suspension
Two court cases, namely Texas Medical Association v. United States Department of Health and Human Services, Case No. 6:23-cv-59-JDK (TMA IV) and Texas Medical Association, et al. v. United States Department of Health and Human Services, Case No. 6:22-cv-450-JDK (TMA III), are central to the recent suspension of the federal IDR process.
In TMA IV, the U.S. District Court for the Eastern District of Texas ruled on August 3rd, vacating the batching provisions and the $350 administrative fee established in December of the previous year. This decision came after the Texas Medical Association and other providers challenged the increased administrative fees and rules regarding batching claims, which required services to be billed under the exact same code to be considered eligible for batching. The court sided with healthcare providers, deeming these provisions unlawful due to the lack of a notice and comment period.
TMA III, another case, challenged portions of the July 2021 interim final rules proposed by the Departments of Health and Human Services, Labor, and Treasury. These rules provided guidance on how the qualifying payment amount (QPA) is calculated, which certified IDR entities use to determine payment amounts for disputed bills. The court ruled in favor of the plaintiffs in TMA III, vacating portions of the interim rules and related guidance.
Implications of the Court Rulings for the Federal IDR Process
These court rulings represent a temporary victory for healthcare providers. In TMA IV, CMS reduced the administrative fee back to $50, making the process more affordable. Additionally, the vacating of the batching rules could simplify the dispute initiation process and reduce administrative burdens for providers.
TMA III clarified important aspects of the federal IDR process. It emphasized that the QPA must be based on actual rates for services performed by a provider, excluding “ghost rates.” The ruling also required plans to calculate the QPA based on provider specialty and include various payment elements in the calculation. Furthermore, self-insured group health plans were prohibited from using rates from other plans administered by third-party administrators.
These clarifications provide a clearer framework for the QPA calculation, ensuring it reflects rates for specific services within the same geographic area and specialty. The court rulings also clarified deadlines for notice or denial of payment.
What Should Providers Do Now?
Healthcare providers should consider the potential impact of these court rulings on the federal IDR process. The reduced administrative fee may encourage more participation in the process, and the simplified batching rules could alleviate disputes’ bottlenecks. However, providers should remain vigilant about lingering issues, such as payers’ failure to engage in good-faith negotiations and process delays.
As new regulations and guidance are expected, providers should monitor updates closely. The temporary suspension of federal IDR process operations means that providers must remain prepared for potential changes and continue to adapt their strategies accordingly.
