A federal district court got it right when it rejected the government’s attempt to implement an independent-dispute resolution (IDR) process that was at odds with the No Surprises Act, physicians say. Now a federal appeals court needs to uphold that decision.
The district court ruled that the No Surprises Act’s final rule puts a heavy thumb on the scale to favor insurers in the IDR process, a bias that would hurt patients and physicians if implemented, the AMA and the American Hospital Association (AHA) say in an amicus brief to the U.S. 5th Circuit Court of Appeals as it now considers the case, Texas Medical Association et al. v. U.S. Department of Health and Human Services et al.
The final rule overemphasizes the qualifying payment amount (QPA), which is the median rate paid to in-network physicians, hospital and others. Consequently, if the appellate court overturns the lower court decision, insurers will likely insist on below-market rates and then would have more leverage if a dispute over payment goes to an arbitrator, physicians and hospitals tell the court.
Already—because the Departments of Health and Human Services, Labor, the Treasury and the Office of Personnel Management have shown their preference for the QPA—insurers have offered physicians drastically reduced in-network rates and have threatened to terminate contracts if physicians do not accept those terms.
“Over time, these artificially low rates and disproportionate consolidated power in the hands of insurers will compound, leading to destabilizing market effects—threatening the viability of physician practices and the scope of medical services nationwide. Ultimately, the victims will be the patients who will lose access to care,” the AMA-AHA brief tells the court.
Follow the law, avoid “black box”
Congress passed the No Surprises Act to protect patients from unexpected medical expenses when they get care at facilities outside of their insurance network or from out-of-network physicians or other clinicians at an in-network hospital, ambulatory surgery center or freestanding emergency department. Learn more with the AMA about implementation of the No Surprises Act.
The AMA and AHA support protecting patients from surprise medical bills and want the law to succeed. They say the final rule needs to follow the clear language in the No Surprises Act that directs arbitrators to consider the QPA along with five other factors when deciding payment disputes. Those include the level of training of a physician or other health professional and the case acuity of the patient getting care. The law also says arbitrators must consider any other relevant information that either party submits.
But the final rule doesn’t allow that to happen. The brief lays out, among other things, how it requires arbitrators to discount factors that the QPA already accounts for and notes that insurers have the ultimate power to calculate the QPA because the regulation charges them with that task. Insurers don’t have to inform physicians how the QPA is calculated.
“The makeup of the QPA is essentially a black box,” the brief says. Physicians and other health professionals “thus have no way to assess—much less contest—whether the QPA accounts for another given factor when providers and insurers simultaneously submit their offers to the IDR arbitrator.”
Still worse, the AMA and AHA say, “an arbitrator is powerless to consider evidence regarding a non-QPA factor ostensibly ‘accounted for’ in the insurer-calculated QPA, even if the arbitrator disagrees with the weight the insurer gave it and even if this disagreement materially affects the selection of the final rate.”
In October, CMS reopened the IDR portal for new single and bundled claims. However, the portal for all batched claims, new and previously initiated, remains closed while CMS assesses how to comply with a court order.