The House Ways and Means Committee held a hearing last week to discuss the implementation of the No Surprises Act (NSA). In a rare moment of Congressional consensus, bipartisan agreement was reached that the NSA implementation strayed from congressional intent. The Independent Dispute Resolution (IDR) process, which is the mechanism utilized for settling out-of-network payment disputes between providers and payers, was highlighted as being ineffective. The Committee also highlighted how the NSA has made it hard for providers to find network coverage and negatively impacted staffing. Additionally, CMS released a new proposed rule to update and raise the administrative fee for entities seeking to initiate the IDR process. This is on the heels of a TMA lawsuit that ruled that CMS can’t raise the fee by 600% from the initial proposal, as it was done earlier by CMS.

House Ways and Means Hearing on No Surprises Act

  • The IDR process was singled out as being overloaded, contentious and lopsided. Witnesses argued that the IDR process forces providers to lose in-network coverage and accept low payments with no enforcement guarantees.
    • Witnesses in the hearing called out the Qualified Payment Amount (QPA), which is the basis for determining individual cost sharing for items and services, as the leading concern for why the IDR process skews in the favor of payers.
  • Rural Health Care (RHCs) were highlighted as being disproportionately negatively impacted. Because of being small and lacking negotiating power, rural facilities are being hit hard by payers, forcing them to accept low contracting rates or lose network coverage. Payers are emboldened by the NSA due to its unfair tilt favoring their interests over providers. Concerns were raised that, without action, many RHCs will shutter operations due to a lack of financial viability.

We have agreements, but will we have a solution?

The future is cloudy regarding what action will be taken to mitigate the poor implementation. Advocates are pushing for CMS to:

  • Continue to maintain the IDR administrative fee at $50, which keeps the IDR process from being cost-prohibitive for many facilities.
  • Require payers to disclose to providers how they are calculating the QPA, which is one of the factors that arbiters consider when determining the out-of-network payment rate in the IDR process. Otherwise, only one party enters the dispute process with the QPA knowledge and whether it accurately represents a median contracted rate. Currently, the arbiter and provider are unable to challenge this factor, as neither the statute nor the regulations require payors to share this information.
  • Revise the batching and bundling guidance to allow for a more rational process for facilities to dispute inappropriate reimbursement.
  • Ensure that payers are making payments in a reasonable period. The payer must be held responsible for failing to pay providers within the allotted 30-day window.

A Proposed Fix to Administrative Fees

Last week, CMS released a proposed rule that would increase the administrative fee for disputes initiated under the IDR process from $50 to $150 per party per dispute. The departments also propose increasing the fee range for certified IDR entities by 20% for single determinations and 25% for batched determinations. This is in response to a federal judge in Texas that ordered the Agency to vacate nationwide a federal fee increase and batching rule for the IDR process for certain out-of-network providers and group health plans. It was determined that the fee increase violated the Administrative Procedures Act requirement. In response to the ruling, CMS has temporarily suspended the IDR process, including the ability to initiate new disputes.