Legal Ruling Triggers Changes to No Surprises Act

By Jonathan Springston, Editor, Relias Media

The Departments of Health and Human Services, Labor, and Treasury announced this week changes will be made to certain parts of the No Surprises Act after a federal court invalidated a portion of the governing rule concerning dispute resolutions.

Last month, the U.S. District Court for the Eastern District of Texas invalidated the independent dispute resolution (IDR) process, specifically over concerns about the so-called qualifying payment amount (QPA).

“The QPA is typically the median rate the insurer would have paid for the service if provided by an in-network provider or facility. And because insurers had ultimate say on what in-network rates they accepted in 2019, insurers now hold ultimate power — and are charged by regulation — to calculate the QPA,” Judge Jeremy Kernodle wrote. “Plaintiffs have established that they will likely suffer financial harm because … the rule’s presumption in favor of the offer closest to the QPA ‘will systematically reduce out-of-network reimbursement compared to an IDR process without such a presumption.”

Although almost all of the No Surprises Act will remain intact, the federal government is withdrawing related guidance concerning the IDR, updating the IDR process in accordance with the court ruling, and providing training on the revisions.

Various groups, including the Texas Medical Association, the American College of Emergency Physicians (ACEP), the American Society of Anesthesiologists, and the American College of Radiology, filed lawsuits challenging not the consumer protections afforded under the No Surprises Act, only the way certain parts of the law were implemented.

ACEP, a vocal opponent of the IDR language, argued “giving unequal weight to the QPA tilts the process unreasonably in favor of insurance companies.”

“Congress wrote this law to create an unbiased system for billing dispute resolution,” said ACEP President Gillian Schmitz, MD, FACEP. “Instead, the way the law is being implemented opens the door for insurance companies to narrow their networks and reduce patient access to care. It is a good sign for everyone who relies on emergency care that the Texas court clearly recognized the need for change.”

American Medical Association President Gerald Harmon, MD, called the court’s ruling a “proper reading of the statute and remedy to the rule’s flawed interpretation of the independent dispute resolution process passed by Congress as a confirmation of the goals of the No Surprise Act and the patient protections it contains.”

More background on the No Surprises Act can be found here, here, and here.