What Lawmakers Talked About during the HHS FY23 Budget Hearings

Xavier Becerra made the rounds on Capitol Hill recently in his capacity as Secretary of Health and Human Services (HHS) to testify on the Biden administration’s Fiscal Year (FY) 2023 budget request for HHS.  Beyond the secretary’s submitted testimony – which was virtually the same for every hearing – here is a countdown of the top five health-related topics on lawmakers’ minds that were discussed across seven congressional hearings on the HHS budget request.

5. Ending the PHE

In a few hearings, lawmakers questioned Becerra on when the administration plans to unwind the COVID-19 public health emergency (PHE), which is currently set to expire on July 16, 2022.  Each and every time, Becerra reiterated the administration’s commitment to providing 60 days’ before ending the PHE in order to give states and health care providers time to prepare.  In recent weeks, the administration has given no indication that it will simply let the current PHE expire in two months.  Since May 16, 2022 marked exactly 60 days before the current PHE expiration date, the administration is all but certain to renew the PHE for another 90-day period come July.

4. Telehealth Waivers

One reason why lawmakers are so interested in how long the PHE will last is because several emergency health care flexibilities are tied to the end of the PHE.  These flexibilities include several Medicare telehealth waivers that waive geographic site originating requirements and allow coverage of audio-only services, among other items.  During the hearings, Becerra repeatedly thanked lawmakers extending temporary telehealth waivers for 151 days – 5 months –  beyond the end of the PHE in the Fiscal Year (FY) 2022 omnibus

Members were also strongly supportive of extending at least some of the telehealth waivers permanently. Some of the telehealth benefits lawmakers cited include increased access to health care in rural areas and relief for the health care workforce shortage.  Becerra voiced agreements on telehealth’s many benefits during the hearings, and he urged lawmakers to work with the administration on developing legislation to make the temporary telehealth authorities permanent.  Fortunately, members are already hard at work and a bipartisan group of House members have already introduced legislation to permanently expand coverage of audio-only telehealth and remove geographic restrictions on originating sites.

3. No Surprises Act

Members from both parties across multiple committees criticized the secretary for not following congressional intent in implementing the No Surprises Act because the rulemaking process establishes the Qualifying Payment Amount (QPA) as the presumptive out-of-network rate in the independent dispute resolution (IDR) process.  They argued that doing so tips the scale in favor of insurers during the IDR process. During the hearing, authors of the No Surprises Act like House Ways and Means Committee Chairman Richard Neal (D-MA) said members went to great lengths to ensure that the legislation established a level playing for all factors to be considered in the IDR process.   

In February 2022, a district court ruling struck down provisions of the No Surprises Act that gave weight to the QPA.  Becerra assured members during the hearings that the administration’s final rule on the No Surprises Act will heed the court’s ruling, although he declined to provide a timeline  on when  the rule will be released.  The secretary also said that HHS is working with the Department of Justice (DOJ) on whether to appeal or accept the ruling.  Additionally, Becerra was confident that the new rule will protect patients from surprise medical bills. 

2. 988 Suicide Hotline

988 will officially become the new suicide hotline on July 16, 2022, and members were curious to see how the administration is ensuring the hotline will work from day one.  States and territories will be responsible for operating the actual hotline, and Becerra explained that the administration is providing states with funding to make sure they can onboard enough counselors and behavioral health professionals to take incoming calls.  In the event that existing state call centers are overwhelmed, Becerra told lawmakers that HHS is working to set-up back-up call centers.  As the launch date approaches, Becerra assured the congressional committees that HHS is “keeping tabs” with states on call center preparation, although he noted that some states will be in a better position than others to take calls right away once the new hotline goes live this summer.


The FY 2022 omnibus established the Advanced Research Projects Agency for Health (ARPA-H) as the newest biomedical research agency within HHS.  While members were unanimous in their support of the new agency, some including Reps. Rosa DeLauro (D-CT) and Anna Eshoo (D-CA) were critical of the administration’s decision to house ARPA-H within the organizational structure of the National Institutes of Health (NIH).  DeLauro, Eshoo, and others had been advocating for ARPA-H to be an independent agency within HHS because they felt this arrangement would help cultivate an independent culture within the new agency that would best facilitate the development of new cures.  Additionally, some members including Sen. Jerry Moran (R-KS) and Rep. Tom Cole (R-OK) were concerned that the administration’s was proposing additional FY 2023 funding for ARPA-H at the expense of additional funding for existing research projects at NIH.

Becerra assured lawmakers that the placement of ARPA-H was purely administrative, and he explained that having NIH assume functions like accounting and human resources would allow ARPA-H to focus on developing breakthroughs from the get-go.  To further point to the new agency’s independence, he said the ARPA-H director would report to the secretary – not the NIH director – and he added that ARPA-H would not be “physically housed” within the NIH campus. 

Becerra additionally told the congressional panels that ARPA-H will be operational once a director is appointed.  While the secretary said the search for a director is currently underway, he was unable to provide a timeline. 

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.   

What’s in the Surprise Billing Rule, and What Happens Next?

It’s the beginning of the end for surprise medical bills.  On July 1, the Biden-Harris Administration through the Department of Health and Human Services (HHS), the Department of Labor, and the Department of the Treasury (collectively known as the Departments), along with the Office of Personnel Management (OPM), released an interim final rule as a first step in implementing the No Surprises Act that was signed into law as part of the omnibus appropriations package in late 2020.  However, the regulations won’t go into effect until January 1, 2022, and stakeholders can provide comments by September 7.   

What’s In the Rule?

Below are the provisions in the interim final rule that establishes new protections from surprise billing and excessive cost-sharing for consumers receiving health care items and services.  

  • Surprise billing will be banned.  The interim final rule bans out-of-network charges for emergency services, regardless of location.  Providers are required to bill emergency services on an in-network basis without prior authorization. The rule also prohibits surprise billing for ancillary services at in-network facilities in all cases, including anesthesiology services. 
  • Patients must consent to waive balance-billing protections. The rule directs federal agencies to establish a process to allow patients to waive their balance-billing protections and consent to out-of-network charges.  Notably, providers are not allowed to request patient consent in three scenarios: (1) The provider provides an ancillary service not selected by the patients, such as a radiologist or anesthesiologist; (2) there are no in-network providers available at the facility; or (3) the service is urgent or arises from unforeseen circumstances.
  • Insurers have 30 days to issue an interim payment or notice of denial from insurers. The interim final rule requires health plans to make an initial payment or issue a notice of denial to providers in 30 days after it receives a clean claim. 
  • CMS must determine the qualifying payment amount. The rule calls on the Centers for Medicare and Medicaid Services (CMS) to define the qualifying payment amount (QPA), which will calculate patient cost-sharing and be used by an arbitrator in the independent dispute resolution process. The rule addresses several factors that will determine how the rates are set, including the type of contract, insurance market, geographic region, and rates for same or similar services. 
  • Insurers must provide more transparency.  The interim final rule requires health plans to take several steps to promote price transparency and by requiring them to provide an advanced explanation of benefits, transitional continuity of coverage when a provider leaves the network, and access to accurate provider network directories. 

What’s Next?

The interim final rule issued on July 1 is only the first step in a multipart regulatory process, as the Departments will need to issue two additional rules to fully enact the No Surprises Act. 

By October 1, the Departments are required to put forth a rule on an audit process to ensure that plans and insurers are complying with the QPA calculation and requirement.  The audit may be performed by federal or state officials, depending on who is enforcing the surprise bill.  Enforcement follows the same rules as the Affordable Care Act, with the federal government tasked with enforcing self-insured group health plans, while states may enforce rules over non-group health plans and fully insured employer-sponsored plans.  The rule expected by October 1 will contain details on how the auditing process will work as well as how federal agencies will address enforcement. 

By December 27, the Departments must outline through rulemaking the details of an independent dispute resolution (IDR) process that providers and health plans can opt for if they fail to reach an agreement on an out-of-network rate.  The IDR process is characterized as binding, baseball-style arbitration, meaning the arbitrator must select one party’s offer.  Federal regulators face the challenge of setting up an IDR process that’s considered fair but doesn’t cause providers and insurers to overuse the process and incur higher administrative costs.  The details of the IDR process have been debated repeatedly among stakeholders and are considered to be the most consequential part of the No Surprises Act.

What Are the Reactions?

Initial reactions to the interim final rule suggest the rule favors employers and insurers over hospitals.  The American Benefits Council, an organization who advocates for employer-sponsored plans, applauded the publication of the  interim final rule as it included many of the organization’s recommendations. However, the council noted that many key issues won’t be addressed until the release of the rule on the IDR process.  One fundamental issue the council cited is confirmation that either party participating in IDR can defer the QPA except in extenuating circumstances.  Similarly, the ERISA Industry Committee applauded the rule for “taking a firm stand” to protect Americans from surprise billing and address high health care costs.  In contrast, the California Medical Association said it has “serious concerns” about the new regulations, specifically as they pertain to the QPA, although the organization declined to specify its concerns.   

What the Rulemaking Process Means for Surprise Billing

The battle among healthcare stakeholders over how to address the issue of surprise medical bills isn’t over.  The FY 2021 omnibus appropriations bill passed at the end of last year included the No Suprises Act, language designed to alleviate financial burdens on patients that can result largely when patients see out-of-network providers.  The next step will be the Department of Health and Human Services’s (HHS) release of a rule to implement the new federal law that sets up guardrails for providers and insurers alike.    Patient groups and health care stakeholders have been working with the agency  to try shape the law in their favor.  What can we expect?


With the first part of the interim final rule due July 1, 2021, it looks like the government is likely to meet its statutory deadline. The Centers for Medicare and Medicaid Services (CMS) sent the draft to the Office of Management and Budget for review on June 8.  By law, the ban on surprise billing is scheduled to go into effect on January 1, 2022. 

Surprise Billing Part One

The law sets up a multi-part regulatory process — the July 1st rule is expected to contain details on how plans will calculate the qualifying amount to determine a patient’s cost-sharing obligation for out-of-network medical bills.  The rule is also anticipated to include guidance regarding notice and consent requirements that government how an out-of-network providers should obtain a patient’s consent before treating the patient.  Two additional deadlines for agency rulemaking this year are: 1) October 1, to establish a process to audit health plans for compliance; and 2) December 27, creating an independent dispute resolution (IDR) process.

Questions for the Rulemaking Process

Many provisions of the new law will depend on regulatory interpretation and guidance, leaving the agency to  fill in the details. Two key policy areas stakeholders are closely watching including how rates will be calculated and patient consent to treat by out-of-network providers will be obtained.   

Rates.  CMS will determine how insurers should calculate the initial payment to out-of-network providers before either party agrees on a final cost.  Determining this rate will be no easy feat, as provider payment rates for health care services are the result of negotiations between insurers and providers and can vary plan by plan and provider by provider.  Providers may favor leverage gained in these negotiations under the new law that could result in higher payments.

Dispute Resolution Process.  If a provider and a health plan fail to reach an agreement on an out-of-network rate, either party can opt for a binding, baseball-style IDR process whereby the arbitrator must select one party’s offer.  During the IDR process, the arbitrator may consider several kinds of information, including median in-network rates, case mix, and the complexity of the service. The HHS, Labor and Treasury departments face the challenge of setting up an IDR process that is considered fair but doesn’t drive providers and insurers to overuse the process.  Based on experiences with New York state’s IDR process, some experts fear an overreliance on arbitration could lead to higher health care costs.     

Consent.  Out-of-network providers must obtain consent from patients seeking treatment for non-emergency services before treatment can begin.  Exceptions apply to anesthesiologists, pathologists, radiologists and other specialists that are among the largest sources of surprise bills.  There is concern about the potential for loopholes that might still allow patients to receive surprise bills, especially in the case where an out-of-network provider must obtain consent from a patient before treatment.  While requiring patients to provide consent may be well-intended, the US Public Interest Research Group points out that requiring consent essentially puts the patient back in the middle, counter to the goals of thelaw.

Other areas of regulatory interpretation are expected to include how to monitor and punish providers who violate the ban, and how to address situations where patients cannot meaningfully consent to out-of-network care, such as emergency care.

What Stakeholders Are Saying

From the beginning of the year, health care stakeholders have shifted their lobbying efforts from the Hill to federal agencies.  Since March, HHS has been holding calls with stakeholder organizations to obtain feedback.  Additionally, several organizations have written to HHS with their recommendations for implementation.  Below are some key requests from organizations that have written to the Department. 

The American Association of Orthopaedic Surgeons (AAOS) voiced support for using an in-network median rate based on the rate for all local health plans and not simply the products of the insurer during the IDR process.  AAOS also suggested creating specific criteria for determining what constitutes “good faith” to show that physicians have adequately engaged in the IDR process.

The Association of American Medical Colleges (AAMC) asked that HHS provide language or a template that out-of-network providers may use when obtaining permission from patients to provide medical services, as well as allow providers and health plans a minimum 30 days to kick off the IDR process and 30 days to submit their offer.  Notably, AAMC also recommended that HHS delay implementation of the surprise billing ban by at least one year due to the complexity of the law. 

A group of 30 patient and disease organizations including the American Cancer Society and the American Heart Association recommend that states and HHS engage in enforcement action when cost estimates provided to a patient in advance of a medical procedures differ significantly from the billed charges.  The organizations also argue  that states should be required to report enforcement activities related to the law to the federal government.

Insurers are equally concerned about the implementation of the law.  A recent survey of 100 executives representing 85 different health payers found 64% are concerned about the timeline of implementation, echoing AAMC’s concerns.  Additionally, 95% expressed concern about the health care system’s ability to achieve compliance by the January 1, 2022 deadline.

All Eyes on the Administration

With critical rulemaking expected to begin to come out this year, , the fight over surprise billing is far from overHospitals and insurers are directing their attention at regulators and top agency officials to shape the new surprise billing law in their favor and will likely call upon Capitol Hill for help resolving any ongoing concerns.  This means the conversation in Washington on surprise billing is sure to continue even beyond the implementation of thenew law, as stakeholders continue to scrutinize it and the Administration releases guidance related to the law.  The outcome of the Administration’s rulemaking is also important because it will send a signal about how aggressively the Administration plans to regulate the health care industry.