A federal court previously ruled that the Biden administration’s interim rule implementing the independent-dispute resolution process (IDR) that Congress created in the No Surprises Act didn’t do what lawmakers intended—and now physicians are back in court less than a year later continuing the fight to right that wrong.

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In an amicus brief, the AMA and the American Hospital Association (AHA) tell the U.S. District Court for the Eastern District of Texas Tyler Division that the government didn’t make the requires changes in the final rule to comply with the court’s ruling that the interim rule didn’t meet Congress’ intent.

That intent was for arbitrators to consider the qualifying payment amount (QPA)—the median rate paid to in-network physicians, hospitals and others—along with five other factors when deciding payment disputes.

Instead, the U.S. Departments of Health and Human Services, Labor and Treasury, along with the Office of Personnel Management departments are abiding by a final rule that “overemphasizes the QPA in ways that favor insurers, with serious collateral effects on all negotiations” between physicians and insurers.

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The AMA and AHA are longtime supporters of the protecting patients from surprise medical bills and want the law to succeed. The law, which took effect in January, is meant to protect patients from unexpected medical expenses when they receive care at facilities outside of their insurance network or from out-of-network physicians or other nonphysician clinicians at an in-network hospital, ambulatory surgery center or freestanding emergency department.

But the final rule “jeopardizes that success by threatening serious harm to patients and the provision of health care in this country,” says the AMA and AHA brief that supports the lawsuit, Texas Medical Association et al. v. U.S. Department of Health and Human Services et al. That’s because “insurers know they can obtain payment rates through IDR arbitration near the below-market QPA.”

Visit AMA Advocacy in Action to find out what’s at stake in creating fairness in out-of-network billing disputes and other advocacy priorities the AMA is actively working on.

 

 

Congress knows how to mandate in a way that gives one factor more or less weight compared to others, but they didn’t do that in the No Surprises Act, the brief says.

Congress even rejected proposals that would have prioritized the median contracted rate that the QPA is based upon, the brief points out. Yet the final rule requires arbitrators to ignore any information a physician submits related to the non-QPA factors if the QPA accounts for those factors. And physicians “have no way to assess—much less contest—whether the QPA accounts for a given factor when providers and insurers simultaneously submit their offers to the IDR arbitrator,” the brief tells the court.

“Still worse,” the brief says, “the arbitrator is powerless to consider evidence regarding a non-QPA factor if the insurer-calculated QPA already accounts for it, even if the arbitrator disagrees with the weight the insurer gave it.”

The Biden administration’s rule “snatched the decision of how to weigh the various statutorily mandated factors from the hands of the arbitrator—i.e., the independent entity Congress selected—and placed it squarely into the hands of self-interested insurers.”

The AMA offers a toolkit for physicians on disputing out-of-network payments (PDF) using the law.

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The insurer-friendly regulations allow the companies to demand physicians take cuts in payment. The brief tells the court that “ultimately, the victims will be the patients who lose ready access to care.”

One example is a group of North Carolina emergency physicians that operates on thin margins, serving 11 emergency departments—one designated as having a provider shortage and others in rural areas. In 2020, the group’s physicians served 425,000 patients, of which 44% were uninsured or Medicaid recipients.

As the final rule was about to take effect last year, Blue Cross Blue Shield of North Carolina threatened to end the group’s contract if it didn’t accept an immediate 20% cut to its contracted rates.

“It’s far from clear what will happen to patients when groups like this can no longer afford to serve them,” the AMA and AHA brief says.

Find out more about the cases in which the AMA Litigation Center is providing assistance and learn about the Litigation Center’s case-selection criteria.

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