While the Texas Medical Association awaits action on its lawsuit over part of recent rulemaking for the federal surprise billing law, TMA recently teamed with the American Medical Association and others to engage the Biden administration outside court.
TMA and scores of other state medical and national specialty societies sent a letter on Nov. 17 asking three federal agencies to reconsider the disputed portion of rulemaking for the No Surprises Act. The 2020 law established an independent dispute resolution (IDR) process governing ERISA-regulated insurers and other groups and individual plans in which an arbitrator selects either a physician’s proposed amount or a health plan’s, similar to Texas’ IDR law for state-regulated health plans.
But the federal rule for the No Surprises Act requires an arbitrator to presume that the health plan’s median contracted rate, also known as the qualifying payment amount (QPA), is “the appropriate out-of-network rate,” and to select the offer closest to the QPA unless “credible information” demonstrates the QPA isn’t the appropriate rate.
TMA objected to that presumption in its October lawsuit, asking a U.S. district court in Tyler to restore the fair, balanced IDR process Congress intended when passing the law, in which the arbitrator would weigh all relevant factors. The Nov. 17 letter made the same request of the secretaries of the Health and Human Services, Treasury, and Labor departments.
“To be clear, our request is not to unravel the [No Surprises Act] or delay implementation of any of its patient protections,” the physician organizations wrote. “Instead, we ask that you revise the most recent [rule] to conform with the [law’s] language to allow an IDR entity the discretion to consider all the relevant information submitted by the parties to determine a fair out-of-network payment to physicians,” without assuming that the QPA is the appropriate payment amount.
A skewed IDR process “that restricts physicians’ ability to make their case for a reasonable out-of-network payment removes a critical remaining incentive for insurers to negotiate fair contracts with physicians,” medicine added.
“While none of our organizations anticipated a high volume of claims going all the way through the dispute process to IDR when the [law] was enacted, we knew that the possibility of a physician successfully making the case for a fair out-of-network payment to an IDR entity could help influence a health insurer to come to the negotiating table in the first place, offer a reasonable initial payment when a surprise bill happens, and settle most disputes in the open negotiations process,” the organizations wrote. “But, in implementing the IDR process in a way that essentially predetermines the outcome to be at the 50th percentile of contract rates, that important check on negotiating incentives established by Congress has largely been stripped away.”
The letter added that meaningful contract negotiations create health care system efficiencies, including not just reduced use of dispute resolution, but also reduced administrative waste and more value-based payment arrangements.
The No Surprises Act takes effect in January and the first arbitrations are expected to start taking place in March.