Medicare Compliance & Reimbursement

Court decision causes Federal IDR process operations suspension.

Since lawmakers announced the No Surprises Act in 2021 and the feds implemented the provisions through a series of final rules, stakeholders have argued against specific parts. From industry consternation to myriad lawsuits, the legislation has taken some hits while the regulators continue to address issues and tweak requirements. Read on for the latest update.

• Refresher: Surprise billing has been on the Centers for Medicare & Medicaid Services’ (CMS) agenda for years, but it wasn’t until Congress tackled the problem in the Consolidated Appropriations Act, 2021 with regulatory reform that things started to heat up. The Departments of Health and Human Services (HHS), Labor, and Treasury, in tandem with the Office of Personnel Management (OPM) and CMS, implemented the legislation via three separate rules on the provisions. They included the following updates:
• Requirements Related to Surprise Billing: Part I was published in the Federal Register on July 13, 2021. This first release outlined the basics and looked at emergency services, cost sharing, balance billing, and disclosures (see Medicare Compliance & Reimbursement, Vol. 47, No. 14).
• Requirements Related to Surprise Billing: Part II was published in the Federal Register on Oct. 7, 2021. The second release focused on independent dispute resolutions (IDR), patients’ rights and disputes, and good-faith estimates (see Medicare Compliance & Reimbursement, Vol. 47, No. 21).
• Requirements Related to Surprise Billing: Part III was published in the Federal Register on Aug. 26, 2022. The final rule dealt with fallout from two U.S. District Court for the Eastern District of Texas decision on Feb. 23, 2022 and July 26, 2022 respectively, which vacated specific sections of the October 2021 interim final rule on the IDR process and qualifying payment amount (QPA) decision making (see Medicare Compliance & Reimbursement, Vol. 48, Nos. 9 & 19).

Court Ruling Throws Another Wrench in the Regulation

On Aug. 3, 2023 the U.S. District Court for the Eastern District of Texas again weighed in on provisions of the No Surprises Act — this time offering an opinion and order.

Case details: The Departments had bumped up administrative fees from $50 to $350 “due to supplemental data analysis and increasing expenditures in carrying out the Federal IDR process since the development of the prior 2023 guidance,” CMS noted in a Dec. 23, 2022 summary update. The new fee structure was implemented starting Jan. 1, 2023. Review the related CMS notice at www.cms.gov/cciio/resources/regulations-and-guidance/downloads/amended-cy2023-fee-guidance-federal-independent-dispute-resolution-process-nsa.pdf.

But the Texas Medical Association (TMA) argued that the administrative fee hikes were “prohibitive for providers with small-value claims,” and the court ruled in TMA’s favor, explain attorneys Kirk Davis and Danielle Gordet with Akerman LLP in online legal analysis. “The court concluded that the IDR fee violates the Administrative Procedure Act (APA), which requires agencies to undergo a ‘notice-and-comment’ procedure when issuing substantive rules, unless an exception applies,” Davis and Gordet note.

Result: On Aug. 25, the Departments responded by “temporarily suspend[ing] *all* Federal IDR process operations in order to make changes necessary to comply with the court’s opinion and order,” CMS expounds on its No Surprises Act webpage. “Disputing parties should continue to engage in open negotiation.”

On Sept. 5, CMS clarified the NSA guidance with another update. “Effective September 5, 2023, the Departments have directed certified IDR entities to proceed with eligibility determinations for single and bundled disputes submitted on or before August 3, 2023,” the agency says. “All other aspects of Federal IDR process operations remain suspended. Disputing parties may continue to engage in open negotiation.”

Caveat: Refunds won’t be issued for administrative fees paid by paper check postmarked prior to Aug. 3 or submitted electronically; however, the Departments will issue refunds for those received on or after Aug. 3. “The Departments acknowledge the disparity that may exist if one party to a dispute is deemed to be eligible for a refund while the other one is not, but does not address equalizing any such disparity,” Davis and Gordet explain.

Resource: Find all the NSA notices on the various IDR changes, whether court-mandated or by the Departments, as well as advice on how to initiate a dispute at www.cms.gov/ priorities/legislation/no-surprises-act/provider-health-plan-payment-disputes.