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Biden Administration issues Final Rules on No Surprises Act
Last week, the Departments of Labor, Health and Human Services (HHS), and the Treasury (“the Departments”) issued Final Rules addressing several provisions of the payment process for out-of-network care under the No Surprises Act (NSA).
The Final Rules and supporting FAQs respond to several concerns raised by the AMA and state and national medical specialty societies, most prominent being the removal of the rebuttable presumption that the Qualifying Payment Amount (QPA) is the appropriate out-of-network rate. (The QPA is presumed to be the plan’s median contracted rate for a service but the AMA has raised concern (PDF) that it may not be representative.)
In Oct. 2021, the Departments had issued interim final rules (IFR II) requiring that arbiters in the Independent Dispute Resolution (IDR) process presume that the QPA is the correct out-of-network rate and select the offer closest to the QPA, unless the arbiter determined that credible information submitted by the parties showed that the QPA was materially different. The AMA expressed significant concern (PDF) with this rebuttable presumption in favor of the QPA and the impact it would have on physicians’ ability to negotiate fair contacts with health plans.
The AMA and the American Hospital Association (AHA) filed a lawsuit on Dec. 9, 2021, in the U.S. District Court for the District of Columbia, arguing that the IFR II conflicts with the statute by establishing a presumption in favor of the QPA. Also, on Oct. 28, 2021, the Texas Medical Association (TMA) filed a lawsuit in the U.S. Federal District Court for the Eastern District of Texas arguing the same. In Feb. 2022, that court found in favor of TMA and vacated the provisions in the IFR II that created the rebuttable presumption. The Final Rules remove the vacated provisions and the requirements on the arbiter to presume that the QPA is the appropriate out-of-network rate—a significant step in the right direction toward a more balanced IDR process.
While the Departments state that arbiters should select the offer that best represents that value of the service after considering the QPA and all permissible information submitted by the parties, they also add requirements that may continue, at least some, overreliance on the QPA in the IDR process to the detriment of physicians. For example, the Final Rules prohibit “double counting” of factors presumed to be included in the QPA calculation and require that IDR entities include in written reports their reasoning for not choosing the offer closest to the QPA, if applicable. The AMA is still analyzing the impact of these provisions.
The Final Rules also make additional important changes championed by the AMA and medical societies, including:
- Clarifying that the initiating party to an open negotiation is always permitted to send the standard Federal initiation notice (i.e., a plan cannot require physicians/providers to use the plan’s proprietary portal)
- Requiring plans to provide information on why a claim was downcoded if the QPA is based on a downcoded service or modifier
- Clarifying that plans must calculate QPAs separately for each physician specialty to address the impact of non-negotiated contract rates (i.e. “ghost rates”) on the median
View a more detailed summary of the Final Rules (PDF). Find more information on the NSA including AMA toolkits, summaries and correspondence. Additionally, further analysis on the Final Rules and litigation efforts will be forthcoming.
