To protect consumers from surprise medical bills, Congress passed the No Surprises Act in December 2020 after lengthy bipartisan negotiations. Unfortunately, a disparity between the way this bill was drafted and the way the Biden administration proposed to implement the law threatens to undermine this major victory for American families who have struggled with this issue for years.
The objective of the law without surprises is twofold. First, to protect consumers covered by commercial insurance plans from surprise medical bills if they received medical services from an out-of-network provider. It also removes the patient from the middle of payment disputes between insurance plans and an out-of-network provider. Second, the law provides a methodology that takes into account a number of factors that can affect appropriate rates for services provided to patients when billing disputes arise between insurers and providers. It’s those provisions dealing with how to determine what that off-grid rate should be that has generated a lot of debate and concern.
In addition to including good faith estimates for uninsured (or self-paid) individuals, the bill passed by Congress also provided a period for the insurance plan and provider to negotiate a possible settlement. If settlement negotiations failed, the law provided for a federal Independent Dispute Resolution (IDR) process that required an IDR entity, or mediator, to consider specific factors in determining the appropriate rate for an out-of-network provider.
During debates on the bill, members of Congress defined seven specific factors that an IDR entity must consider, if submitted, with equal weight when determining out-of-network rates. The objective was to prevent a devaluation of the cost of medical procedures and services or to create circumstances that might make certain medical services more difficult to find. After the law passed unsurprisingly, executive agencies quickly released regulations in stages, including a second Interim Final Rule (IFR) issued by the U.S. Department of Health and Human Services (HHS) and others. agencies on September 30, 2021.
IFR introduced what is called the Qualifying Payment Amount (QPA), which is defined as the median contractual rate of an insurance plan. Unlike the no-surprises law, the IFR directed that the median network rate be used as the appropriate payment amount rather than considering each of the factors specifically set out in the law. It even went so far as to assert that there is a presumption that the QPA is the appropriate out-of-network rate and left it to the parties to rebut or rebut such a presumption by possibly presenting other credible information. Accordingly, the proposed rule was received with concern.
The American Hospital Association (AHA), American Medical Association (AMA) and other provider groups have launched a legal challenge to the independent dispute resolution provisions in the interim final rule. This limited and tailored lawsuit, which leaves other patient protections enshrined in the statute unsurprisingly intact, argues that the rule ignores statutory factors to consider and therefore the dispute resolution process is flawed.
Acknowledging that the interim final rule ignored specific requirements set forth in the law they passed, 152 members of Congress also sent a letter to the Biden administration asking the agencies to change the rule to reflect the requirements set out in the law with no surprises. They note that during debate in Congress, lawmakers reached a carefully crafted compromise that specifically discussed and determined that the IDR process would consider many factors that affect rates and not default to a rate of preset reference.
This congressional reaction to agency regulation has important ramifications. Beyond the interim final rule, it serves as a reminder that Congress and others must be vigilant and carefully monitor the rules enacted pursuant to bills passed to ensure they accurately reflect legislative language. In the case of the No Surprises Act, that means preserving the carefully negotiated requirements that Congress enacted to provide an IDR process that allows both parties to an off-grid bill dispute to submit all relevant information to make make their case. If this happens, we will protect consumers from surprise medical bills and maintain a process that considers key factors impacting the healthcare market.