New Guidance Instructs IDR Entities to Resume All Payment Determinations Under No Surprises Act

Health Highlights

As of March 17, certified independent dispute resolution (IDR) entities may resume IDR payment determinations under the No Surprises Act (NSA) that were temporarily halted last month due to a Texas court’s decision vacating portions of the final federal regulations implementing the IDR process. The Department of Health and Human Services, the Department of Labor and the Department of the Treasury (the Departments) instructed IDR entities to resume making payment determinations for disputes involving items or services furnished on or after October 25, 2022, the effective date of the final rule regarding the IDR process. The Departments simultaneously issued updated guidance documents for both certified IDR entities and disputing parties regarding information to consider when making these determinations. The notice additionally announced that disputing parties will now begin receiving “a majority” of notices regarding payment determinations directly from the IDR portal and an automated Centers for Medicare & Medicaid Services (CMS) email account. The new guidance carefully avoids implementing a rebuttable presumption in favor of the Qualifying Payment Amount (QPA) or other evidentiary or process hurdles that the Departments previously argued were consistent with the intent of the NSA but that were struck down by the Texas court. The guidance will likely be seen as at least a temporary victory for providers who have argued that the interim final and final rules and related guidance from the Departments favored payors in the IDR process.

Last month, the Departments placed a temporary hold on all IDR payment determinations and instructed IDR entities to recall payment determinations made after February 6 while the Departments considered how they would respond to the February 6 decision by the U.S. District Court for the Eastern District of Texas (referred to as TMA II). In TMA II, the court vacated portions of the August 2022 final rule implementing the IDR process.1 (For more on this, see the Manatt newsletter here.) After the decision, the Departments instructed IDR arbitrators not to issue any new payment determinations but later narrowed that guidance to resume processing payment determinations involving items or services furnished before October 25, 2022, until the Departments had the opportunity to provide further guidance. (For more on this, see the Manatt newsletter here.) The recent March 17 IDR guidance also comes on the heels of demands by several medical associations, including the American College of Emergency Physicians, the American College of Radiology and the American Society of Anesthesiologists, for the Departments to resume all IDR payment determinations paused by the February order.

In the notice, the Departments stated that all payment determinations could proceed because all necessary updates to the federal IDR portal and federal IDR process guidance documents had been finalized and now reflect the payment determination standards set forth in the August 2022 final rules as modified by the opinion and order in TMA II. The Departments issued two separate process guidance documents—one for certified IDR entities and another for disputing parties. The guidance documents are intended to provide “information on how the disputing parties should engage in open negotiation prior to the Federal IDR Process, initiate the Federal IDR Process, select a certified IDR entity, and meet the requirements of the Federal IDR Process.” All of this has made for a complex web of rules and guidance. The notice clarified that the guidance documents issued on March 17, 2023, govern payment determinations “made on or after February 6, 2023 for items and services furnished on or after October 25, 2022 for plan years (in the individual market, policy years) beginning on or after January 1, 2022 by an out-of-network provider subject to the Requirements Related to Surprise Billing; Part II, 86 FR 55980, and Requirements Related to Surprise Billing; Final Rule, 87 FR 52618.” Meanwhile, payment determinations made before February 6, 2023, for items and services furnished on or after October 25, 2022, for the same plan/policy years are subject to the guidance document issued on October 31, 2022, and those made before February 6, 2023, for care provided before October 25, 2022, for the same plan years are subject to the guidance document issued on October 7, 2022, and effective July 26, 2022. (See Table 1 below.)

Table 1: Applicable Federal Independent Dispute Resolution (IDR) Process Guidance for Certified IDR Entities and Disputing Parties

Plan or Policy Year Beginning on or after 1/1/22 IDR Payment Determination Made Before or After 2/6/23

Items and Services Furnished
Before or On/After

Applicable Rules Applicable Guidance
Before After Before On/After
    Interim Final Rules
10/07/22 Guidance
    Final Rules Apply
10/31/22 Guidance
    Final Rules Apply
March 2023 Guidance

The guidance documents state that the QPA—the health plan’s median contracted rate for the same or substantially similar service with insurers in the same geographic area, adjusted for inflation—is among the factors that IDR entities must consider. Consistent with the decisions in TMA I and TMA II, the guidance documents do not instruct certified IDR entities to weigh the QPA more heavily than other information submitted to the IDR arbitrator or establish evidentiary presumptions or other hurdles in favor of the QPA. The guidance also specifically states that it is not the role of the IDR entity to determine whether the QPA has been calculated correctly. However, the guidance does encourage an IDR entity that believes a QPA has not been calculated correctly to notify the Departments for further action.

The parties in TMA I and TMA II still have time to exercise their right to appeal the decision within 60 days after entry of the judgment or order appealed.2 This as well as two additional cases involving the TMA and the same set of plaintiffs pending in the same Texas federal district court regarding the NSA regulations have the potential to impact the role the QPA plays in the IDR process going forward. TMA III (Case 6:22-cv-00450), filed on November 30, 2022, challenges an interim final regulation issued in July 2021, 86 Fed. Reg. 36,872 (July 13, 2021), regarding calculation of the QPA. TMA IV (Case 6:23-cv-00059), filed on January 30, 2023, challenges the Departments’ decision to increase the filing fee for IDR proceedings from $50 to $350, which may incentivize the batching of claims as the guidance provides that batched claims are charged a single fee.

In all, some are hopeful that with the IDR process reopened, arbiters can start working through the significant backlog—over 90,000 disputes were initiated between health care providers and insurance plans from April 15 to September 30, 2022, according to a December report from the CMS. However, the new guidance gives more discretion to the IDR arbitrators and will likely result in broader proceedings.

1 Texas Medical Association et al. v. United States Department of Health and Human Services et al., Case No. 6:22-cv-373-JDK (Feb. 6, 2023) (TMA II).

2 Fed. R. App. P. 4(a)(1)(B)(ii).



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