QUESTION:
I see in this week’s New Cases that the Connecticut No Surprises Act does not have a private cause of action in the event an insurance company fails to reimburse a provider who provides care to an Out-Of-Network (“OON”) emergency department patient in the manner required by that state’s No Surprises Act. Is this the same under the federal No Surprises Act that went into effect on January 1, 2022?
OUR ANSWER FROM HORTYSPRINGER ATTORNEY HENRY CASALE:
No. The federal No Surprises Act (“NSA”) anticipates that disputes will arise and has two separate arbitration processes that may be used in the event of a dispute. One arbitration process is for patients who receive medical bills for a non-covered service that exceeds the good faith estimate required by the NSA by at least $400. The other arbitration process is specifically intended to apply in the event of a dispute between an OON provider and an insurer, such as the one that was described in the Connecticut case.
To summarize, the NSA restricts a hospital (or where permitted by state law, an independent emergency department) and/or the emergency department physicians from charging OON patients who receive emergency services at the OON emergency department more than the OON patients would be charged if the OON patients were treated at an in-network emergency department.
If the NSA applies, then neither the hospital, the emergency department physicians, nor the insurer can charge the OON emergency patient more than the in-network amount. The NSA then requires the insurer to reimburse the hospital and the emergency department physicians for the care they have provided to the OON emergency department patient. However, the NSA does not dictate the amount that the insurer must pay the OON hospital and the emergency department physicians unless the amount is required by a state All-Payer Model Agreement or specified by state law.
In the absence of an applicable All-Payer Model Agreement or specified state law, the insurer must make an initial payment or a denial of payment to the OON provider within 30 calendar days. The hope is that the insurer and the OON providers will be able to agree on the amount of reimbursement due the OON hospital and the emergency department physicians. However, if the parties cannot agree, then, unlike the Connecticut law, the NSA has a dispute resolution process that must be followed by all involved in any fee dispute.
If either party believes that the payment amount is not appropriate (it is either too high or too low), it has 30 business days from the date of initial payment or denial of payment to notify the other party that it would like to negotiate. Once notified, the parties may enter into a 30-business day open negotiation period to determine an alternate payment amount. If following this 30-business day period, the OON providers are still not happy with the amount being offered by the insurer, then the OON providers may take advantage of the NSA’s arbitration process in order to determine the amount of payment.
Unfortunately, on February 23, 2022, the United States District Court for the Eastern District of Texas, in the case of Texas Medical Ass’n, et al. v. United States Department of Health and Human Services, et al., Case No. 6:21-cv-425 (E.D. Tex.), invalidated the NSA regulations governing this arbitration process. However, in April 2022, CMS and the Departments of Labor and the Treasury issued Independent Dispute Resolution (IDR) Guidance for Certified IDR Entities. Those guidelines can be found at: https://www.cms.gov/sites/default/files/2022-04/Revised-IDR-Process-Guidance-Certified-IDREs.pdf
Section 6 of these guidelines addresses payment disputes. The guidelines have retained “baseball” (i.e., High/Low) type arbitration. In this type of arbitration, the arbitrator must choose one of the party’s offers. The arbitrator has no authority to “split the baby in half” or otherwise deviate from either of those offers.
The guidelines then require the arbitrator to consider the “Qualified Payment Amount” (“QPA”). Unlike the original regulations that were the subject of the Federal Court’s injunction, these guidelines also permit the arbitrator to also take into account additional credible information relating to the offers submitted by the parties that relates to the circumstances.
Generally, the QPA is defined as the median of the contracted rates recognized by the plan for the same or similar item or service that is provided by a provider in the same or similar specialty and provided in the same geographic region in which the item or service under dispute was furnished, increased by inflation. The plan must calculate the QPA using a methodology established in the July 2021 NSA interim final rules. The guidelines then state that information is considered credible if, upon critical analysis, the information is worthy of belief and is trustworthy.
“Worthy of belief and is trustworthy” information that may be considered by the arbitrator includes the level of training, experience, and quality and outcomes measurements of the provider or facility that furnished the item or service in dispute; the experience or level of training of a provider that was necessary to provide the item or service to the patient; whether their experience or training made an impact on the care that was provided; the market share held by the provider or facility or that of the plan in the geographic region in which the item or service was provided; how the market share affects the appropriate out‑of‑network rate; and the acuity and complexity of the care provided.
Therefore, regardless of the terms of any state law, the federal NSA provides OON providers with the right to arbitrate payment disputes and to provide information that is trustworthy and pertains to the care at issue.
TO LEARN MORE ABOUT THE NSA, THE OIG FRAUD ENFORCEMENT ACTIONS DISCUSSED IN THIS WEEK’S GOVERNMENT AT WORK, THE FEDERAL FRAUD AND ABUSE LAWS, AND MUCH MORE, JOIN HENRY CASALE, DAN MULHOLLAND AND MARY PATERNI FOR OUR “HOSPITAL-PHYSICIAN CONTRACTS AND COMPLIANCE CLINIC” THAT WILL BE HELD IN LAS VEGAS, NEVADA FROM NOVEMBER 17‑19.