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On Friday, the Departments issued final rules for the No Surprises Act’s (“NSA”) independent dispute resolution (“IDR Process”). These final rules go into effect 60 days after the date of publication in the Federal Register and apply to plan years beginning on or after January 1, 2022.

Enacted December 27, 2020, the NSA includes Federal protections against surprise billing by limiting out of network cost sharing and prohibiting balance billing in certain circumstances. The Departments of Treasury, Labor, and Health and Human Services (the “Departments”) previously issued interim final rules to implement provisions of the IDR process under the NSA to resolve payment disputes between providers and payors for emergency services and services furnished by out-of-network providers at in-network facilities, which services are subject to balance billing prohibitions.[1]

On August 19, 2022, the Departments issued final rules concerning the IDR process. Here are the highlights:

1. There is no rebuttable presumption in favor of the payor’s qualified payment amount (“QPA”), or the median in-network rate. The arbitrator must consider each of the statutory factors when making a payment determination.[2] However, if the arbitrator determines the QPA already accounts for any of those additional factors, for example, the acuity of the patient, then the arbitrator cannot give additional weight to the acuity information provided by the provider.  The Departments say this would result in “double- counting” information and would skew the correct out-of-network payment.  Additionally, the arbitrator cannot consider information prohibited under the rule.[3]
2. Payors cannot reject a provider’s Open Negotiation request for failing to submit it through the payor’s online portal, and the payor must provide an e-mail and telephone number for providers to submit the Departments’ template Open Negotiation form. 
3. If the payor uses the QPA as its Recognized Amount (i.e., what it pays the provider), then the payor must identify whether it has downcoded a service, why the code was downcoded, and what the QPA would have been had it not downcoded the code.  During the IDR process, the provider may submit information demonstrating the billed code was more appropriate than the downcoded service code.
4. The payor must submit the following information to the provider: (i) if the payor uses a database to calculate the QPA, it must timely identify what database was used; (ii) whether the QPA was calculated using a fee schedule; (iii) whether it used a similar service code to what was billed by the provider; and (iv) whether it calculated the QPA using contracts that include risk-sharing, bonus, penalty, or other incentive-based or retrospective payment adjustments and that were excluded from the QPA calculation.
5. The arbitrator must submit a written statement to the parties explaining its rationale behind its out-of-network payment determination.

The Wolfe Pincavage team is well-versed in the requirements for the IDR process and guides providers and medical groups through every aspect of the No Surprises Act.

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[1] 86 FR 36872 (July 13, 2921); 86 FR 55980 (October 7, 2021).

[2] These factors are: (i) QPA; (ii) quality and outcome measurements of the provider that furnished the services; (iii) acuity and condition of the patient or the complexity of the services; (iv) training, experience, and quality of the personnel that furnished the services; (v) teaching status, case mix, and scope of services that the provider furnishes; (vi) demonstrations of good faith efforts (or lack thereof) made by the parties and, if applicable, contracts rates between the parties in the prior 4 years; and (vi) additional information a party submits in response to the arbitrator’s request. 

[3] These prohibited factors are (i) usual and customary charges (including payment or reimbursement rates expressed as a proportion of usual and customary charges); (ii) the amount that would have been billed if the provider was not subject to a prohibition on balance billing; and (iii) payment or reimbursement rates payable by a public payor (e.g., Medicare, Medicaid).