On August 3, 2023, the US District Court for the Eastern District of Texas ruled on the implementation of the No Surprises Act in Texas Medical Association, et al. v. US Department of Health and Human Services, et al. (TMA IV).
In TMA IV, the plaintiffs challenged two things:
The court found that the Departments violated the Administrative Procedure Act when they raised the IDR administrative fee from $50 to $350 for 2023 and established batching rules that did not allow providers to batch claims together in the IDR process. The court said that the changes were substantive and should have gone through notice and comment rulemaking. Ultimately, the court vacated both policies nationwide.
As a result, the IDR fee will return to $50 (for now). The batching rules are also vacated until the Departments go through rulemaking, resulting in a temporary suspension of the IDR portal. The Departments are working on a proposed rule that will likely include some batching policies.
The Departments can appeal this decision, as they did for TMA II.
A recent article by the Kaiser Family Foundation (KFF) and National Public Radio (NPR) raised the prospect that patients may still see surprise medical bills despite the enactment of the No Surprises Act (NSA).
The article, entitled A Surprise-Billing Law Loophole? Her Pregnancy Led to a Six-Figure Hospital Bill, reports the story of a woman who was admitted for an extended inpatient hospital stay and follow-up postpartum procedure after experiencing a serious pregnancy complication. According to the article, the plan initially determined that the hospital was a nonparticipating provider, but the specialty clinic at which she was treated was in the carrier’s network. (The clinic’s doctors admitted patients only to the nonparticipating provider hospital.) The result was some $135,000 in uncovered expenses.
There are two relevant statutory provisions at play here:
A great deal is riding on whether facilities and providers are participating or nonparticipating for NSA purposes, and whether providers are in or out of network for ACA purposes. If it is possible for a nonparticipating facility to have a participating provider, then there would seem to be a gap in the NSA’s protections. In the government’s view, this is not possible, so there is no gap.
The US Departments of Labor, Health and Human Services, and the Treasury (the Departments) weighed in on the issue in Q&As 1 and 2 of recently issued FAQs Part 60. According to the Departments, either:
Under no circumstance, however, can a facility be a “participating” provider for NSA purposes and at the same time claim that they are not subject to the ACA out-or-pocket limits on in-network cost sharing.
The KFF/NPR article does not report the details about the underlying contractual arrangements. This might have been a health maintenance organization or other network-related plan, for example. The article does report that the balance bill was reversed, although no rationale is provided. The lesson here, according to the Departments, is that a plan or carrier cannot be in network for one purpose and out of network for other purposes to evade the surprise billing rules.
On February 6, a US district court in Texas vacated provisions of the No Surprises Act final rule related to the independent dispute resolution (IDR) process for determining payment for out-of-network services.
The district court granted summary judgment to the Texas Medical Association, which had brought suit against the US Departments of Health and Human Services (HHS), Labor and the Treasury over the IDR process. The district court held that provisions of the final rule were contrary to law and therefore in violation of the Administrative Procedure Act. The order vacated the provisions of the final rule that require IDR entities to look at the qualifying payment amount first and consider other factors only if those other factors are not already accounted for in the qualifying payment amount.
The departments have not yet filed a notice of appeal or amended their sub-regulatory guidance to align with the district court’s order.
The No Surprises Act (NSA) provides federal protections against surprise billing with respect to emergency services, non-emergency items or services furnished by out-of-network providers at certain in-network healthcare facilities, and air ambulance services furnished by out-of-network providers of air ambulance services. The NSA also establishes that certain federal agencies publish information quarterly about the Federal IDR process. The first such report, Initial Report on the Independent Dispute Resolution (IDR) Process April 15 – September 30, 2022, offers insight into dispute volume, interaction of the Federal IDR process with the claims procedure rules and problems with botched claims.
The COVID-19 pandemic forced lawmakers to respond with an array of legislation to help Americans, such as the No Surprises Act, the Families First Coronavirus Responses Act and the Coronavirus Aid, Relief and Economic Security Act. Now, however, pandemic-related litigation involving the Employee Retirement Income Security Act of 1974 (ERISA) is becoming more common. In this Best Lawyers article, McDermott Partner Ted Becker highlights the major types of pandemic-related litigation, including out-of-network provider litigation, the Racketeer Influenced and Corrupt Organizations Act (RICO) and antitrust claims, and COVID-19-related litigation against ERISA health plans.
On August 19, 2022, the US Departments of Health and Human Services (HHS), Labor and Treasury posted a final rule revising portions of the federal No Surprises Act (NSA). Generally, the rule finalizes three aspects of the two-part interim final rule that the Departments published along with the Office of Personnel Management in 2021. First, the final rule expands the information about the qualifying payment amount (QPA) that plans and issuers (collectively, payers) must disclose to providers and facilities (collectively, providers). Second, it reinterprets the provisions of the NSA that govern the determination of the appropriate out-of-network rate through the federal independent dispute resolution (IDR) process, and prescribes how certified IDR entities are to weigh the QPA and other considerations when selecting one of the parties’ offers. The certified IDR entity must now consider the QPA first, and then give weight to other considerations only if those other considerations are not accounted for in the QPA. Third, the final rule expands the information that a certified IDR entity must provide in its written payment determination to include a statement explaining why the QPA did not already account for other considerations weighed by the IDR entity.
Effective January 1, 2022, the No Surprises Act protects healthcare consumers from surprise medical billing under certain circumstances.
Two health insurance advocacy organizations recently surveyed more than 80 commercial health insurance companies and received responses from 31 companies, which collectively represent 115 million commercial health plan members. These companies reported receiving 600,000 claims covered by the No Surprises Act (NSA) in January and February 2022. However, based on claims experiences from prior years and factoring in processing delays this year, the two organizations estimate the true number of NSA-eligible claims in the first two months of 2022 was actually more than 2 million. The two organizations project that the No Surprises Act could prevent more than 12 million surprise bills in 2022 alone.
Healthcare and life sciences lawyers will likely have plenty of work in 2022 thanks to pending legislative and regulatory actions throughout the healthcare, health insurance, and drug and device industries.
According to this Law360 article, surprise billing, abortion and drug pricing are some of the major issues facing lawmakers and regulators in the year ahead. McDermott Partner Michael Ryan noted that changes to the Medical Device User Fee Amendments (MDUFA) also could be in order.
The Biden administration is giving insurers more time to follow the insurer price transparency rule and the ban on surprise billing. Federal regulators will delay enforcement of machine-readable file provider rates until July 1, rather than the start of 2022. In this article published in Modern Healthcare, McDermott Partner Kate McDonald noted that the initial timeline was “very aggressive.”
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