To protect consumers from surprise medical bills, Congress passed the No Surprises Act in December 2020 after lengthy bipartisan negotiations. Unfortunately, a disparity between how that bill was drafted and how the Biden administration has proposed to implement the law threatens to undermine this major win for American families that have struggled with the issue for years.
The purpose of the No Surprises Act is two-fold. First, to provide protections for 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 considers a number of factors that can impact the appropriate rates for services provided to patients when billing disputes arise between insurers and providers. It is those provisions addressing how to determine what this out-of-network rate should be, that have elicited much debate and concern.
In addition to including good faith estimates for uninsured (or self-pay) individuals, the bill Congress passed also included a period for the insurance plan and provider to negotiate a potential settlement. If the settlement negotiations failed, the Act 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 set out seven specific factors an IDR entity must consider, should they be submitted, with equal weighting when determining out-of-network rates. The goal was to prevent a devaluing of the cost of medical procedures and services or creating circumstances that could make certain medical services harder to find. After the No Surprises Act passed, executive agencies quickly issued regulations in phases, including a second Interim Final Rule (IFR) released by the U.S. Department of Health and Human Services (HHS) and other agencies on September 30, 2021.
The IFR introduced something known as the qualifying payment amount (QPA), which is defined as an insurance plan’s median contracted rate. Contrary to the No Surprises Act, the IFR directed the median in-network rate to 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 state there is a presumption that the QPA is the appropriate out-of-network rate and left it up to the parties to overcome or rebut such a presumption by possibly presenting other credible information. As a result, the proposed rule has been met with concern.
The American Hospital Association (AHA), the American Medical Association (AMA), and other provider groups have issued a legal challenge to the independent dispute resolution provisions in the interim final rule. This limited and tailored lawsuit, which leaves the other patient protections enshrined in the No Surprises Act intact, contends that the rule ignores the statutory factors to be considered and that the dispute resolution process is, therefore, flawed.
Recognizing that the interim final rule ignored the specific requirements set out in the law they passed, 152 members of Congress have also sent a letter to the Biden administration requesting the agencies amend the rule to reflect the requirements set out in the No Surprises Act. They note that during the debate in Congress lawmakers reached a carefully crafted compromise that specifically discussed and determined that the IDR process would consider numerous factors impacting rates and not default to a pre-established benchmark rate.
That reaction by Congress to agencies’ rulemaking authority has important ramifications. Beyond the interim final rule, it serves as a reminder that Congress and others must be vigilant and carefully oversee the rules that are promulgated pursuant to bills that are passed to ensure they properly reflect the statutory language. In the case of the No Surprises Act, it means preserving the carefully negotiated requirements Congress enacted to provide an IDR process that allows both sides of an out-of-network bill dispute to submit all relevant information to make their case. If this happens, we will protect consumers from surprise medical bills and we will maintain a process that considers the major factors impacting the healthcare marketplace.
