A February ruling by Judge Jeremy D. Kernodle in the U.S. District Court for the Eastern District of Texas found portions of the independent dispute resolution (IDR) process, established by the Departments of Health and Human Services (HHS), Labor, and Treasury during last year’s surprise billing rulemaking, to be inconsistent with the No Surprises Act.
QPA Priority Is Out
Namely, in the case of Texas Medical Association and Adam Corley v. U.S. Department of Health and Human Services, et. al., Judge Kernodle ruled that sections of the Departments’ Final Rule that requires arbitrators to give priority consideration to the qualifying payment amount (QPA) when selecting between two payment offers should be withdrawn and invalidated immediately on a nationwide basis.
“The [No Surprises] Act instructs arbitrators to ‘consider’ the QPA and the five other factors in deciding which offer to accept. That’s it. The Rule, in contrast, requires arbitrators to ‘select the offer closest to the QPA’ and deviate from that number only if ‘credible information’ ‘clearly demonstrates’ that the QPA is ‘materially different from the appropriate out-of-network rate,’” Judge Kernodle wrote in his Memorandum Opinion and Order. “The Rule thus impermissibly ‘rewrite[s] statutory language by ascribing additional, material terms.’”
Less than a week later, Departments of Health and Human Services, Labor, and the Treasury announced they are taking the following actions to comply with the judge’s order:
- Effective immediately, withdraw guidance documents that are based on, or that refer to, the portions of the Rule that the court invalidated. Once these documents have been updated to conform with the court’s order, they will promptly repost the updated documents.
- 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.
- 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.
According to Jeffrey Davis, Director of Regulatory and External Affairs at ACEP, these actions should help alleviate at least three concerns providers may have had about the IDR process moving forward.
- First, CMS’s removal and revision of the earlier IDR guidance according to the court order “is a clear indication that the flawed QPA presumptive policy is (at least for now) NOT in effect,” Davis wrote.
- Second, CMS seems to be moving forward on the roll-out of the IDR portal. “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,” Davis wrote. “While CMS had initially given a date of February 28 … it is expected to be operational in the next couple of weeks.”
- Finally, in light of the tight timeline of the IDR process, the Departments are allowing for an additional 15-business day grace period in which to initiate the IDR process.
“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,” Davis wrote.
Other Protections Remain
The court’s ruling did not affect any of the Departments’ other rulemaking under the No Surprises Act. Consumers will 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, according to the Departments in their own Memorandum about the decision.
Also, 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.
But this won’t be the final word on the controversial rulemaking surrounding the IDR process. According to ACEP’s Davis, there are still five other pending cases related to the QPA policies, including ACEP’s own lawsuit filed along with the American College of Radiology and the American Society of Anesthesiologists in the northern district of Illinois before Judge Marvin E. Aspen. The other four cases include:
- AAMS in the District of Columbia before Judge Richard J. Leon;
- American Medical Association (AMA), the American Hospital Association, Renown Health, UMass Memorial Health, Dr. Stuart Squires, and Dr. Victor Kubit in the District of Columbia before Judge Leon;
- Georgia College of Emergency Physicians (GACEP) and Dr. Brett Cannon in the northern district of Georgia before Judge Mark H. Cohen; and
- Dr. Daniel Haller (Haller) and Long Island Surgical PLLC in the eastern district of New York before Judge Ann M. Donnelly.
Also, the Departments could decide to take further legal action in the Texas court case, including appealing the decision.
A Victory for Providers
Still, provider groups are hailing the decision as a victory.
“This decision is a significant win for patients and physicians,” said Gillian Schmitz, MD, FACEP, president of ACEP. “We are optimistic that additional courts will take appropriate steps to make sure that this law can do what Congress intended it to do—protect patients from surprise bills and create a fair process to resolve billing issues.”
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