Feds consider next steps for No Surprises Act

March 7, 2022

The U.S. District Court for the Eastern District of Texas recently invalidated aspects of the federal independent dispute resolution process (IDR) for determining payment for out-of-network services as outlined in a rule governing the No Surprises Act.

In response to the court’s ruling, the departments of Labor, Treasury and Health and Human Services said they will withdraw and then update guidance documents related to the invalidated aspects of the dispute resolution process.

In a news release, the federal departments stressed that the “court's order did not affect any of the departments' other rulemaking under the No Surprises Act. Thus, consumers continue to be protected from surprise bills for out-of-network emergency services, out-of-network air ambulance services, and certain out-of-network services received at in-network facilities. The patient-provider dispute resolution process for uninsured and self-pay consumers to dispute bills that exceed a provider's or facility's good faith estimate by $400 or more also remains available and unchanged by the court's order.”

After the guidance documents are updated and posted, the departments said they will provide training on the revised IDR process for certified IDR entities and disputing parties through webinars and roundtable discussions.

They departments also said they will then open the IDR process for submissions through the IDR Portal.

The No Surprises Act, which was implemented on January 1, 2022, is designed to restrict excessive out-of-pocket costs to consumers resulting from surprise billing and balance billing. When a person with health coverage gets care from an out-of-network provider, such as a pathologist, his or her health plan or issuer usually does not cover the entire out-of-network cost, leaving the person with higher costs than if they had been seen by an in-network provider. In many cases, the out-of-network provider may bill the individual for the difference between the charge and the amount paid by their plan or insurance, unless prohibited by state law. This is known as “balance billing.”

The regulations governing the No Surprises Act also establishes a federal independent dispute-resolution process that out-of-network providers, facilities, providers of air ambulance services, plans, and issuers in the group and individual markets may use to determine the out-of-network rate for applicable items or services after an unsuccessful open negotiation.

According to the Centers for Medicare & Medicaid Services (CMS), studies have shown that in the period from 2010-2016, more than 39% of emergency department visits to in-network hospitals resulted in surprise bills, increasing to 42.8% in 2016. During the same period, the average amount of a surprise medical bill also increased from $220 to $628.

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