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 overall. America’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.