On March 17, 2023, the Centers for Medicare & Medicaid Services issued new guidance for the Independent Dispute Resolution (“IDR”) process under the No Surprises Act for payment determinations made on or after February 6, 2023 for services provided after October 25, 2022. The new guidance was issued in light of federal court decisions striking down the rules governing how IDR entities are to determine payments to out-of-network providers.
Arbitrations under the No Surprises Act are “baseball-style” arbitrations in which both providers and plans submit an offer for the out-of-network payment. The No Surprises Act did not establish a benchmark for determining out-of-network payment amounts, but rather set various factors to be considered by IDR entities. One of the factors was the qualified payment amount (“QPA”), which is the median in-network contract amount for the service at issue in the same geographic area. Other factors specifically listed in the Act included the level of training and experience of the provider, the market share of the non-participating provider and insurer, the acuity of the patient, the teaching status or case mix of the provider, and the good faith efforts (or lack thereof) of the parties to enter into a network agreement.
A federal court twice struck down rules governing the out-of-network payment determinations because they placed “a thumb on the scale for the QPA” despite “unambiguous” language in the Act requiring IDRs to consider all of the listed factors.
The new guidance instructs IDR entities to consider both the QPA and any additional information submitted by the parties consistent with the factors listed in the Act. The guidance specifically states that it is not the role of the IDR entity to determine whether a health plan had correctly calculated the QPA, although it encourages IDR entities and providers to notify the government if they believe that the QPA was incorrectly calculated.
The guidance also requires IDR entities to notify the parties and the government in writing 30 business days from the date of their selection of one of the offers, explaining the underlying rationale for the determination. The written decision must specify the information that demonstrated that the offer selected by the IDR entity best represented the value of the item or service at issue. The written decision must also include the weight the IDR entity gave to the QPA and to any additional information submitted by the parties.
The attorneys at Whatley Kallas, LLP will continue to follow providers’ experience with the IDR process under this new guidance.
The new guidance issued to IDR entities is linked here and the new guidance issued to parties to No Surprises Act arbitrations is linked here. Whatley Kallas’s previous articles on the two federal court decisions striking down portions of the No Surprises Act rules are linked here and here.