In the case of Texas Medical Ass'n, et al. v. US Department of Health and Human Services, et al., the US District Court for the Eastern District of Texas on February 23 invalidated portions of the second interim final rule (IFR) issued by the Departments of Health and Human Services, Labor, and the Treasury (the Departments) under the No Surprises Act.
The first IFR, Requirements Related to Surprise Billing; Part I (Part I), establishes the prohibition on surprise medical billing for all out-of-network emergency services, air ambulance services, and certain out-of-network services provided at in-network facilities. We previously issued a LawFlash discussing the IFR Part I requirements, which details how group health plans and issuers calculate the qualifying payment amount (QPA).
The second IFR, Requirements Related to Surprise Billing; Part II (Part II), in part, implemented the No Surprises Act provisions that provide for a federal independent dispute resolution (IDR) process to resolve disputes between group health plans or issuers and out-of-network providers, facilities, or air ambulance services (collectively, OON Providers) related to the “out-of-network rate” for certain emergent and nonemergent items and services furnished by the OON Provider.
Specifically, Part II provides that “the certified IDR entity must select the offer closest to the QPA unless the certified IDR entity determines that credible information submitted by either party clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate.” This is a slight deviation from the statute, which simply directed IDR entities to consider the QPA in addition to five other “additional circumstances” without providing any specific weight on any one consideration.
The court vacated the portion of the second IFR dealing with the rebuttable presumption in favor of the QPA, holding that directing the IDR entities to presume that the amount closest to the QPA is the proper out-of-network rate conflicts with the No Surprises Act statutory provisions by giving the QPA more weight than the other five circumstances, and that the Departments improperly bypassed traditional notice and comment rulemaking before issuing the second IFR.
As a federal court decision, it will apply nationwide. Consequently, the Departments issued a memorandum on February 28 to address the Texas court’s ruling. The Departments indicated their next steps will be to immediately withdraw the portions of the second IFR and other guidance that have been invalidated and reissue those documents, provide training to the certified IDR entities and other pertinent parties on the revised guidance, and open the IDR process for submissions through an “IDR Portal.”
Despite this case and the issues it calls into question, group health plans should continue to move forward with their No Surprises Act compliance. Plan sponsors should touch base with their third-party administrators and insurers, as applicable, to discuss whether there is any desire to adjust the plan’s out-of-network rate in light of this guidance.