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March 3, 2022

The Flawed Independent Dispute Resolution Process Has Been Fixed… For Now

As you probably all know, there has been a significant development in the legal battle over the flawed independent dispute resolution (IDR) process to resolve payment disputes for out-of-network services—a court order has been issued in one of the six active cases. Last week, Judge Jeremy D. Kernodle rendered a decision in the United States District Court for the Eastern District of Texas, siding with the plaintiffs: the Texas Medical Association and an individual physician, Dr. Adam Corley. Judge Kernodle found that the IDR process as established by the Biden Administration was inconsistent with the No Surprises Act. He ordered that the specific flawed policy be withdrawn and invalidated immediately on a nationwide basis (everything else in the law is still in effect).

ACEP put out a statement praising Judge Kernodle’s decision. This is exactly what we have been arguing and pushing for ever since the Departments of Health and Human Services (HHS), Labor, and Treasury (the Departments) established the policy in the second interim final regulation (IFR) issued last September! In the infamous IFR, the Departments instructed arbiters to make the qualifying payment amount (the QPA—or median in-network rate) the presumptive payment amount for out-of-network services. I have focused numerous Regs and Eggs blogs on explaining why this policy (which I call the “QPA presumptive” policy) not only violates the Congressional intent of the No Surprises Act, but also will have a devastating impact on the insurance market—leading to narrower provider networks, lower reimbursement rates, and more provider consolidation.

While the decision by Judge Kernodle is definitely a giant step in the right direction, it in no way closes the book on this flawed QPA presumptive policy. In other words, we can’t spike the football and do a touchdown dance yet. There are still five other pending cases, including the lawsuit that ACEP, the American College of Radiology, and the American Society of Anesthesiologists have filed. The Departments can also still decide to take further legal action in the Texas court case, including appealing the decision.

Given that we are sort of in legal limbo here, we were waiting on the Departments to issue some sort of statement clarifying where things currently stand. Earlier this week, we got that statement—both from the Centers for Medicare & Medicaid Services (CMS) within HHS and from the Department of Labor (click here for CMS’ version of the statement and here for the Department of Labor’s version).

The statement starts by clarifying that the Texas court order did NOT affect the important patient protections embedded in the No Surprises Act, specifically the ban on balance billing. This clarification is significant, since some stakeholders, especially the insurance industry, have been falsely stating that the court order would in fact invalidate the patient protections by halting the implementation of the law. The Departments therefore have hopefully now shut the door to these misrepresentations from the insurance industry and others about the implications of the six lawsuits against the No Surprises Act.

The Departments then state that they are reviewing the court’s decision and considering next steps. However, in the meantime, in order to comply with the order, the Departments state that they will take the following actions:

  1. Effective immediately, withdraw guidance documents that are based on, or that refer to, the portions of the IFR that the court invalidated. Once these documents have been updated to conform with the court’s order, the Departments will promptly repost the updated documents.
  2. Provide training on the revised guidance for certified IDR entities and Disputing Parties. This training will be offered through webinars and roundtable discussions and will occur after the above-referenced documents are updated.
  3. Open the IDR process for submissions through the IDR Portal. For disputes for which the open negotiation period has expired, the Departments will permit submission of a notice of initiation of the IDR process within 15 business days following the opening of the IDR Portal.

There are a couple major takeaways from these three steps the Departments are taking. First and foremost, taking down the IDR guidance and revising it based on the court order is a clear indication that the flawed QPA presumptive policy is (at least for now) NOT in effect. CMS—one of the main federal agencies implementing the No Surprises Act— had issued guidance both for arbitrators and for disputing parties (health insurers and providers) about how the IDR process will work. Both guidance documents had obviously referenced the QPA presumptive policy that is now invalidated. These, and other guidance documents that may have referenced the policy, have been removed from CMS’ No Surprises Act website and are in the process of being revised. After they are revised, the guidance documents should clearly state that the arbiter, when deciding whether to select the offer from the provider or health insurer, must fairly consider all the evidence it is presented by both parties (WITHOUT assuming the QPA is the appropriate payment amount for the out-of-network service.) Again, this is a small victory, but we will have to wait and see what further legal actions the Departments decide to take.

Second, with respect to the IDR Portal (which will be used to facilitate claims through the IDR process), many of you have asked when it will be up and running. While CMS had initially given a date of February 28, it has now been delayed. It is expected to be operational in the next couple of weeks. I'm pleased that ACEP was able to get one of our emergency physician members on a select list of stakeholders who are conducting user testing sessions with CMS on the IDR Portal. Through that process, our member can provide direct input to CMS on the design of the IDR Portal. It appears that the first iteration of the IDR Portal will be fairly rudimentary, with more functionalities being added over time.

Although CMS has been delayed in establishing the IDR Portal, the statement may help alleviate some concern that the court order would further delay CMS’ work on the Portal or the agency’s overall willingness to make the Portal fully functional. Further, the statement acknowledges that some stakeholders may be getting ready to initiate the IDR process and could be getting nervous that the IDR Portal is not available yet. The 30-day open negotiation period occurs right before the IDR process-- and disputing parties could have already entered into that negotiation process for some claims from early January. Once the open negotiation period ends, under the IFR, parties only have four business days to trigger the IDR process. The Departments are aware that this timeline doesn’t give stakeholders much of a chance to get used to the IDR Portal once it’s operational, so they are giving a 15-business day grace period for which to initiate the IDR process.

According to my rough calculations, it wouldn’t be until mid-to-late March when a claim could be ready for the IDR process. Let us suppose an out-of-network service was delivered on January 1, 2022—the day the No Surprises Act took effect. Here are the general steps and associated timelines that follow:

  • The claim needs to be submitted to health plan (there is no time requirement for this, but it could take a week or two depending on the provider’s administrative capacity to send claims to health plan).
  • Once a “clean claim” is received, the health plan has 30 calendar days to issue an initial payment or notice of denial. Therefore, we are looking at early- to mid-February depending on how quickly the provider submits the claim to the health plan.
  • The provider then has 30 business days to start the negotiation process from when the initial payment or notice of denial is received. We could assume that the provider initiates this process immediately, so we are still in the early- to mid-February timeframe.
  • The negotiation period lasts 30 business days, so now we are looking at mid-to-late March when the first step of the IDR process could be triggered.

Although one of your claims may not be ready for the IDR process yet, we definitely recognize the need for you to have time to explore the IDR Portal before you need to actually start submitting claims. Therefore, we will continue to closely monitor CMS’ progress on the Portal.

Stepping back and looking at the overall picture of where things stand at this point in time, ACEP is extremely pleased that the Departments are complying with the court order, revising the IDR guidance, and working to get the IDR Portal up and running. However, before concluding, I want to emphasize that the patient protections and all of the requirements under the No Surprises Act will still be in full effect, no matter what happens with any of the lawsuits. I highly encourage you, if you haven’t already, to visit ACEP’s No Surprises Act website to learn more about the law and its requirements. Please feel to reach out to me with any questions.

Until next week, this is Jeffrey saying, enjoy reading regs with your eggs!

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