The No Surprises Act (NSA)—The End of the Beginning.
March 14, 2022
By Ed Gaines, VP Regulatory Affairs & Industry Liaison
The late great Winston Churchill once said, “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” This quote becomes especially relevant today in healthcare when considering the current state of the NSA, which was signed into law on 12/27/20 with an effective date of 1/1/22. Below are highlights of the key features:
- The law’s overarching purpose was to protect patients from out of network (OON)/balance bills (BB), particularly in emergency and other hospital-based contexts where the patient may not otherwise know or consent to being treated by OON clinicians;
- Patients are removed from any dispute between clinicians and health plans over reimbursement rates; Patients are responsible for their in-network cost sharing and any remaining “balance bill”—the difference between the clinician charges and the health plan’s allowed amount—would be adjusted off and not billed to the patient;
- Health plans were required to describe in the 835 remittance advice the “qualifying payment amount” (QPA) which they determined based on their median in network rates as of Jan. 31, 2019, adjusted by the CPI-U;
- The QPA served at least two primary purposes—1. The patient cost sharing would be set at, for example, a percentage of the QPA, e.g., 20% in a typical 80/20 PPO plan, and communicated to the clinicians; 2. As a factor in the independent dispute resolution (IDR) process along with other statutory factors.
- The NSA statutory factors that were listed as ones that the IDR adjudicator “shall consider” included the clinicians training and experience, whether the hospital was a teaching facility, the clinicians quality and outcome measurements and results, the patient’s acuity and complexity of the care, prior health plan contracted rates for the prior 4 years, good faith or lack thereof of the parties to enter into a contract and the market share of the clinician or health plan in a particular market (“the IDR Factors”).
- The IDR process and procedure were established in two primary “interim final rules” (IFRs) in July and Sept. 2021.
- The Sept. IFR provided a major “surprise” of its own—that the QPA (the health plan’s median in network rate as of 2019 determined by them and transparent to no one) would be the presumptive final payment, unless the clinician presented “credible evidence” from the IDR Factors that the final payment amount should be materially different from the QPA (ACEP’s Director of Regulatory Affairs (and former CMS official) Jeff Davis appropriately calls this the “QPA Presumptive Policy”).
- The reaction from the clinician and hospital stakeholder community was swift and pronounced—6 lawsuits were filed in federal court (see highlights below), claiming that the “Tri Departments”—HHS, Labor and Treasury—interpretation violated the statutory provisions of the NSA and that the rule making process violated the Administrative Procedures Act (APA).
- Meanwhile, after the NSA statute was enacted in late 2021, CMS began offering “listening sessions” regarding the federal IDR “portal” that would be used to determine the IDR dispute process, on an invitation only basis to the clinician and hospital community, in addition to health plans and entities selected to be “certified IDR entities” for federal dispute resolution. ACEP, ASA, AMA and AHA were among those clinician and hospital stakeholders invited to provide feedback (see discussion below).
The Lawsuits and the Reactions:
- The first lawsuit was filed on Oct. 28, 2021, by the Texas Medical Association (TMA)and Dr. Adam Corley, in Tyler, TX, and three (3) main contentions were included:
- The NSA statutory provisions required that the IDR adjudicator “shall consider” the QPA and the additional IDR Factors, in making his/her final decision regarding payment for the physician services—thus the Sept. IFR should be vacated;
- The NSA provided the Tri Depts. with no statutory authority to create the QPA Presumptive Policy and as such the Policy should be vacated;
- The Tri Depts. violated the APA in issuing an interim final rule as opposed to a notice of proposed rule making (NPRM), with a 60-day comment period before issuing the final rule.
- The Air Ambulance Association filed suit challenging the rules related to their members—it was later consolidated into the AMA/AHA case.
- AMA, AHA and other plaintiffs then filed in DC federal court on similar grounds to the TMA case cited above.
- ACEP/ACR/ASA joined in their own lawsuit in Chicago federal court and GA-ACEP, the Medical Association of GA (MAG) and others joined in a separate case in Atlanta federal court. The sixth case was filed in NY federal court.
- On 2/23/22, the federal court issued a stunning victory to the TMA and Dr. Corley, finding for the plaintiffs on three grounds listed above.
- The court then vacated the Sept. IFR and remanded the case back to the Tri Depts. for rule making consistent with the opinion.
- Technically, the Departments have 60 days to file an appeal in the TX case but to date no appeal has been filed.
- The TX court’s order did not impact the NSA patient protections, patient disclosure requirements and good faith estimate (GFE) requirements for scheduled, non-emergent care for uninsured and self-pay patients.
Legal Equivalent of the “Twilight Zone”
What occurred next (without engaging in hyperbole) was nothing short of stunning—CMS announced on 2/28/22 that it was withdrawing guidance documents that were based on, or that referred to the portions of the Sept. IFR that were invalidated by the TX federal court. CMS could have easily appealed the TX decision (as noted they still can but it wouldn’t make sense) and asked for a stay of the district court’s order vacating their rule. That way their “QPA Presumptive Policy” would have remained in effect for months while the case meandered through the appellate process.
Then, in the GA-ACEP/MAG case and the ACEP/ACR/ASA case noted above, HHS asked for a 60 day stay of the proceedings while they engage in rule making consistent with the TX court order. In the latter case, HHS said in DC district court filings that they expected to have new rules written by May 2022. The plaintiff physician organizations agreed to the stand still requested by the federal government. The AMA/AHA, however, did not agree and their motions for summary judgment will be heard later this month.
Finally, on their most recent “IDR Portal” listening session on March 3, 2022, CMS indicated that the portal would not be launched until the new rules were issued, leaving clinicians in a quandary regarding potential disputes which may be now ripe for IDR. Dates of service (DOS) as of 1/1/22 qualify for IDR after a mandatory 30 days to pay or deny the claim and then a 30-day mandatory negotiation period. As we approach St. Patrick’s Day next week, there are DOS that could be qualified for federal IDR but there is technically no way in which those disputes may be filed as the IDR portal has not been launched. CMS is attempting to ally those concerns by stating that disputes for which the open negotiation period has expired will be permitted and a notice of initiation of the IDR process allowed within 15 business days of the opening of the IDR portal.
So, What to Do:
The reasons that it would make no sense for CMS to file an appeal now is that they have already taken down the above-described documents from their website and have represented to at least two (2) different federal courts that they are in midst of re-writing the NSA rules to be consistent with the TX federal court decision. If they really believe that they were correct in their interpretation, they would have appealed the TX decision and the QPA Presumptive Policy would have remained in effect during the pendency of the appeal. If they were to appeal now and win, they would have to take down yet another set of guidance written to comply with the TX court and go back to their QPA Presumptive Policy. Then the two (2) cases currently on hold in GA and DC would begin again and HHS et al could lose one or both of those cases, in addition to potentially losing the AMA/AHA case. What this means to clinicians is that they should be monitoring health plans compliance with the NSA, how the out of network (OON) payments compare with pre-NSA OON payments and submitting their official 30-day notice of negotiation where they believe that they have claims that qualify for federal IDR. Since the federal IDR portal is not likely to be available until late spring or summer at the earliest—barring a significant change in CMS’ current position—watchful waiting will be the coin of the realm for now. To the extent that your state has an IDR process, these processes should continue. If you believe a health plan is in non-compliance with the NSA requirements, states in general are the ones tasked with NSA enforcement with a few exceptions.