Health Law Scan

Legal Insights and Perspectives for the Healthcare Industry

Pressure continues to mount on the US Department of Health and Human Services (HHS) to reconsider and revise its August 2022 final rule modifying the No Surprises Act independent dispute resolution (IDR) process. The rule is an attempt to revise the original IDR process, which “placed its thumb on the scale” for payors, according to the February 2022 federal district court decision in Texas Medical Association v. US Department of Health and Human Services.

According to the US District Court for the Eastern District of Texas, HHS’s interim final rule defied the plain language of the No Surprises Act by establishing a rebuttable presumption in favor of the qualifying payment amount (QPA) (generally, the median contracted rate in the market for a service), and thereby failed to give appropriate weight to a number of other statutory criteria for resolving reimbursement disputes.

HHS’s August 2022 final rule eliminated the rebuttable presumption relating to the QPA, but industry concerns remained that HHS had continued to over-weight the QPA in the IDR process. The Texas Medical Association filed a separate complaint in October arguing that the August final rule had not corrected the flaws identified by the district court in February. Recently, the chairman and ranking member of the House Ways & Means Committee jointly issued a letter adding their concerns about the rule and encouraging the agency to implement the unambiguous statutory text.

According to the Committee members, “Congress intentionally required [IDR] arbiters to equally consider a series of factors for their decision-making process. Although the [QPA] is an important factor, the statute lists the QPA as one of many factors an IDR entity must consider without giving preference or outsized weight to any one factor.” (Emphasis in original.)

At the heart of their complaint is the “double counting” test adopted by HHS, which directs IDR entities to “consider whether additional information [from other statutory-referenced sources] is already accounted for in the QPA.” If the IDR entity selects a payment rate that is materially different than the QPA, it must explain why those other factors were not already captured in the QPA, which inherently increases the weight of the QPA. HHS was urged to adopt a change to the rule that would require the IDR to separately consider all of the statutory factors.

With the ongoing implementation of various elements of the No Surprises Act, HHS is being pressured to make another fix to the IDR process, which has been burdened by legal challenges from the beginning. Plans and providers will have to continue to adapt to the developing IDR process and focus their appeals on the statutory factors.