In August, the department of Health and Human Services (HHS) issued a third final rule related to the independent dispute resolution process required by the No Surprises Act (NSA). The passage of the NSA in 2021 generally prohibits the practice of ‘balance billing’ in an effort to eliminate unexpected medical bills passed along to patients.

This latest round of rulemaking addresses stakeholder comments and two recent court cases which invalidated parts of the second rule issued for the NSA in October of 2021.

For more details on prior NSA rulemaking, CLICK HERE

What is the Independent Dispute Resolution (IDR) process under the NSA?

The IDR process addresses disputes between health plans and out-of-network providers concerning the amount of payment for out-of-network items or services paid towards the provider. Before the IDR process can be initiated, parties are required to enter an open negotiation period to dispute the initial payment received.

If the parties are unable to form an agreement within 30 days of that initial payment, the parties may then initiate the IDR process. The party initiating the IDR must then propose a certified IDR entity to oversee the negotiations. If the parties can not agree, an IDR entity will be selected by HHS.

What’s changed based on the newest rule?

Originally, the IDR process dictated that both parties submit offers to propose an out-of-network rate for the dispute. The IDR entity must then compare those proposals to a ‘qualifying payment amount’ or QPA, which is generally the median contracted rate for an item or service. Unless the parties demonstrate that the QPA is materially different from the appropriate out-of-network rate, the IDR entity was required to select the offer closest to the QPA.

With the August update, the IDR entities are no longer required to select the closest offer to the QPA. Instead, the entity must select an offer that best represents the value of the item or service after first considering the QPA amount along with any other materials submitted by the parties.

Additionally, the latest rule establishes disclosure requirements for health plans in terms of ‘downcoding’ claims which are included in the calculation of the QPA. ‘Downcoding’ is essentially the changing of medical billing codes on a claim, such as adding or removing a modifier by a health plan, which lowers the reimbursement of the service. When a QPA is based on a downcoded service, health plans must include a statement to inform the provider which includes an explanation of the downcoding and identifies the codes which were altered.

This latest update is a win for providers as the original IDR process favored health plans and insurers due to the requirement to select whichever proposed rate be closest to the QPA amount. In addition to the rule, the Centers for Medicare and Medicaid Services (CMS) released a new webpage to aid providers with the continued implementation of the No Surprises Act.

Additional rulemaking addressing patient protections and provider obligations under the NSA is expected in the upcoming months.

For a more in-depth analysis of this latest rule, please see Reed Smith’s article HERE – the primary resource for this eNews.

As always, ADVOCATE will keep you up to date on this and all issues impacting medical groups as they become available.

Kayley Jaquet

Manager, Regulatory Affairs