NASS Insider

December 07, 2021

Controversy over Surprise Medical Billing Surfaces before Law goes into Effect

As part of the appropriations bill passed at the end of 2020, the No Surprises Act was passed by Congress and signed into law on December 27 to address the issue of surprise medical billing. Since then, it has been in the hands of the Departments of Health and Human Services, Treasury, and Labor to draft the rules governing its implementation. As during the original legislative battle, the rules for implementation of the No Surprises Act have been mired in controversy, particularly after the interim final rule (IFR) was issued by the three departments on September 30. The crux of the controversy centers on the rule tying the independent dispute resolution (IDR) process to a qualifying payment amount (QPA), determined as the median contracted rate recognized by the payer as provided in 2019 for the same or a similar item or service in the geographic region.

According to a press release from the Centers for Medicare and Medicaid Services, “when making a payment determination, certified independent dispute resolution entities must begin with the presumption that the QPA is the appropriate out-of-network (OON) amount.” It further states that “for the independent dispute resolution entity to deviate from the offer closest to the QPA, any information submitted must clearly demonstrate that the value of the item or service is materially different from the QPA.”

This is skewed towards the insurers and payers on two fronts. First, it provides no motivation for insurers to compromise with physicians on OON amounts, since offers closer to the QPA will be looked at more favorably. Second, as the QPA is determined by the median contract rate set by the insurer, it incentivizes them to actively drive down reimbursement rates in future contract negotiations. By definition, it cannot be a fair and balanced dispute resolution if one side unilaterally decides the amount on which the decision is solely based.

While support for and against this rule has been split between payers and providers, it has also created a division within Congress – one that does not fall along party lines. On October 20, the Chairs of the House Energy & Commerce Committee and Senate Health, Education, Labor and Pensions Committee – Rep. Frank Pallone (D-NJ) and Sen. Patty Murray (D-WA), respectively – wrote to the secretaries of the three departments endorsing the IFR as written, stating that it “… is consistent with our intent.”

In direct conflict with that statement, Reps. Tom Suozzi (D-NY) and Brad Wenstrup, DPM (R-OH), wrote a bipartisan letter to the administration, signed by 97 U.S. House members, reinforcing that no single factor — such as the median in-network rate — should carry more weight over the others, as this would create an imbalance in the IDR framework. Senators Maggie Hassan (D-NH) and Bill Cassidy, MD (R-LA) and Reps. Raul Ruiz, MD (D-CA) and Larry Bucshon, MD (R-IN) sent similar bipartisan letters. The IFR goes against the original intent of the legislation, delineated in a fact sheet issued by the joint committees of jurisdiction after the final text was announced last December, which states clearly that “the arbitrator must equally consider many factors.”

NASS, along with the American Medical Association, American College of Surgeons, and a host of other federal and state physician groups have been advocating to Congress and the Biden administration to change this rule. A lawsuit has been filed by the Texas Medical Association challenging the IFR with its standard that the QPA be the sole consideration in the dispute resolution process. While the No Surprise Act is planned to be implemented starting on January 1, 2022, it appears the fight over how to implement it isn’t going to be settled anytime soon.

Heidi Hullinger, MD
New Jersey Spine Specialists
Assistant Professor of Orthopaedics, Rutgers-NJMS
NASS Legislative Committee