Why Feelings Are Mixed on the New Surprise Billing Rule

The administration’s latest interim final rule to implement the No Surprises Act dropped on September 30.  Here’s a look at the various reactions from stakeholders and why they are mixed.

What does it say?  The rule outlines a baseball-style, independent dispute resolution (IDR) process for settling payment disputes between out-of-network providers and commercial insurance plans.  Before the IDR process can begin, both parties involved must enter into a 30-day negotiation period to determine a payment rate.  If these negotiations fail, either party can initiate the IDR process. 

Next, both parties submit their proposed payment rate with supporting documentation to a certified IDR entity, who then issues a binding determination by selecting one of the party’s proposed rates.  When making a determination on which rate to select, the IDR entity must “begin with the presumption” that the most appropriate rate is the median of contracted rates for a specific service in the same geographic region.

  • Why? According to the rule, emphasizing the median in-network rate will help ensure that IDR outcomes are predictable and that stakeholders are not incentivized to overuse the IDR process.

In addition to the median-in network rate, other factors IDR entities may consider include the level of training, experience, and quality and outcomes measurements of the provider or facility that is furnished.

Insurers’ reactions have been favorable overallAmerica’s Health Insurance Plans said the focus on the median in-network rate “is the right approach” to encourage all stakeholders to work together and negotiate in good faith.  And the ERISA Industry Committee said the IDR process will reinforce the intention of the No Surprises Act.” 

But hospitals aren’t so happy.  The Federation of American Hospitals said the rule “misreads Congressional intent” on establishing a “fair and balanced” IDR process, while the American Hospital Association said the rule “unfairly favors insurers to the detriment of hospitals” and other providers. 

Reactions from lawmakers are mixed, too.  Like hospital stakeholders, comments from members of Congress have focused on the rule’s prioritization of median in-network rates in the IDR process.  Ways and Means Committee Chair Richard Neal (D-MA) and Ranking Member Kevin Brady (R-TX) said in an October 5 letter to the administration that the rule’s bias towards a median rate is not consistent with the law passed by Congress, which requires IDR entities to consider a range of factors when determining the appropriate rate. 

However, House Education and Labor Committee Ranking Member Virginia Foxx (R-NC) commented that the rule is “consistent with congressional intent.” Both the Ways and Means Committee and the Education and Labor Committee played key roles in drafting the No Surprises Act. 

When the No Surprises Act passed late last year, it was considered a win for hospitals, who favored settling out-of-network payment disputes with an IDR process.  In contrast, private health plans were advocating benchmark rates based on the median in-network rate as a solution.  By prioritizing median in-network rates in the IDR process, could the administration be attempting to balance the concerns of all health care stakeholders? 

What’s next: The administration will issue a rule later this year to implement the pharmacy and prescription drug reporting requirements of the No Surprises Act.  Despite a 60-day public comment period, the rule is final, and stakeholders will be required to comply with all of its provisions beginning January 1, 2022.  In the meantime, Reps. Neal and Brady have requested additional written justification from key administration officials on how the latest rule complies with the No Surprises Act, and stakeholders will continue to engage with the administration on upcoming rules.   

The Week in Review: June 14-18

ACA Survives Latest Legal Challenge

On June 17, the Supreme Court ruled 7-2 to overturn an appeals court ruling that found the Affordable Care Act’s (ACA) individual mandate to be unconstitutional.  The opinion by Justice Stephen Breyer was joined by the court’s two remaining liberal justices and four of the court’s six conversative justices, while justices Samuel Alito and Neil Gorsuch dissented.  In his opinion, Breyer argued that Texas and the other states that challenged the ACA’s individual mandate failed to show that they were harmed by enforcement of the mandate, which was zeroed out in 2017’s Tax Cuts and Jobs Act.  The ruling, which marks the third time the ACA has been reviewed by the Supreme Court, comes as the Biden Administration seeks to expand the ACA through financial subsidies and Medicaid expansion.    

NIH Study Finds COVID-19 in US Earlier Than Initially Thought

A recent study by the National Institutes of Health (NIH) found COVID-19 may have reached the US as early as December 2019, nearly a month before the World Health Organization announced the discovery of a new coronavirus in Wuhan, China.  By testing for the presence of COVID-19 antibodies in blood collected via the All of US research program between January and March 2020, NIH researchers confirmed the results of a Centers for Disease Control and Prevention study of American Red Cross blood donations that found COVID-19 may have cropped up in the West Coast in December 2019. 

Federal Government Purchases 200M Additional Moderna Doses

On June 16, Moderna announced that the US government purchased 200 million additional doses of its COVID-19 vaccine, bringing the total number of government-ordered doses to 500 million.  According to the company, the additional doses could be used as booster shots or primary vaccinations of children.    Moderna filed for full approval of its vaccine with the Food and Drug Administration (FDA) earlier this month and asked FDA last week to authorize its emergency use in adolescents aged 12 through 17.

McConnell Rejects Manchin’s Voting Rights Counteroffer

Senate Majority Leader Mitch McConnell (R-KY) said on June 17 that Republicans are likely to oppose Sen. Joe Manchin’s (D-WV) voting rights compromise, dashing any hopes for Democrats to advance comprehensive voting reforms.  Manchin introduced his proposal as a counteroffer to Democrats’ For the People Act that could potentially win the support of some moderate Republicans.  Manchin’s proposal includes some reforms which are already popular among Democrats, such as ending partisan gerrymandering and making election day a federal holiday, as well as others which are more appealing to Republicans, like a national voter ID law and allowing maintenance of voter rolls.  However, Senate Republican leaders say the proposal would undermine the authority of state legislatures, taking away their power to set congressional districts.   

Administration Invests $3.2B in COVID Antivirals

On June 17, National Institute of Allergy and Infectious Diseases Director Dr. Anthony Fauci announced the Administration is investing over $3 billion to advance the development of antiviral pills that could be used to treat COVID-19.  The plan, known as the Antiviral Program for Pandemics, will provide support for clinical trials of promising COVID-19 treatments, with the goal of gaining FDA approval for some antivirals and making them available to the public within a year.  During a press briefing, Fauci said the antivirals could prove helpful for immunocompromised people for whom COVID-19 vaccines are less effective. While the federal government has invested billions of dollars in the development of vaccines, considerably fewer resources have been invested in COVID-19 treatments until now. 

ICYMI: Amazon Pledges $125M for Workforce Housing in DC Area

Amazon announced on June 16 it will provide $125 million in financing to build or preserve approximately 1,000 units of affordable housing in the DC area on land owned by Metro, the region’s mass rail transit system.  The tech giant has already committed $2 billion to its Housing Equity Fund, which will finance affordable housing construction in regions that contain the company’s corporate offices, including the metropolitan areas of Seattle, Nashville, and Washington, DC.  Housing prices have notably climbed in the DC area since Amazon selected Arlington, Virginia as the site of its second headquarters.