HHS and federal departments issue final rules to clarify No Surprises Act dispute resolution
The departments say they have received "substantially more" disputed claims than expected.
Photo: Alex Wong/Getty Images
The U.S. Departments of Labor, Health and Human Services, and the Treasury have issued final rules concerning standards related to the arbitration process in implementing the No Surprises Act.
The final rules aim to clarify the process for providers and health insurance companies to resolve their disputes, the departments said in a Friday release.
WHY THIS MATTERS
Importantly for hospitals, the final rules reflect a District Court ruling vacating a portion of the October 2021 interim final rules that required Independent Dispute Resolution entities to select the offer closest to the Qualified Payment Amount.
This process favored insurers, hospitals argued.
The District Court vacated this requirement in rulings in February and July.
The final rules specify that certified IDR entities should select the offer that best represents the value of the item or service under dispute after considering the Qualified Payment Amount (QPA) and all permissible information submitted by the parties.
The departments are adding a definition for the term "downcode" to require additional information from the insurers about the QPA. This must be provided with an initial payment or notice of denial of payment, without a provider, facility, or provider of air ambulance services having to make a request for this information, in cases in which the plan or issuer has downcoded the billed claim, according to the final rules.
These final rules also specify that, if a QPA is based on a downcoded service code or modifier, in addition to the information already required, a plan or issuer must provide a statement that the service code or modifier billed by the provider, facility, or provider of air ambulance services was downcoded; an explanation of why the claim was downcoded, including a description of which service codes were altered, if any, and which modifiers were altered, added, or removed, if any; and the amount that would have been the QPA had the service code or modifier not been downcoded.
The departments are continuing to consider comments on the July 2021 interim final rules about whether additional disclosures related to the QPA calculation methodology should be required to be provided.
In releasing the final rules, the departments said they have received "substantially more" disputed claims than expected.
Between April 15 and August 11, disputing parties initiated more than 46,000 disputes through the federal Independent Dispute Resolution portal, which is substantially more than the departments initially estimated would be submitted for a full year.
Of these, certified IDR entities rendered a payment determination in over 1,200 disputes.
THE LARGER TREND
In December 2021, the American Hospital Association and American Medical Association and others sued HHS and the other federal agencies over implementation of the No Surprises Act.
The groups were not against the legislation, they said in the lawsuit, but took issue with how HHS implemented the Internal Dispute Resolution process to resolve payment rates between provider and payer. The interim final rule stipulated that the arbitrator must select the offer closest to the Qualifying Payment Amount, which is set by the insurer.
The Texas Medical Association also challenged implementation of the interim rules issued in October 2021.
According to the final rules, on February 23 and July 26, the United States District Court for the Eastern District of Texas, in the cases of Texas Medical Association, et al. v. United States Department of Health and Human Services; and LifeNet Inc. v. United States Department of Health and Human Services, vacated portions of the interim final rules issued.
On December 27, 2020, the Consolidated Appropriations Act, which includes the No Surprises Act, was enacted to give protections against surprise billing by limiting out-of-network cost-sharing and prohibit balance-billing.
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
