Healthcare providers got most of what they wanted in a new final rule on how to handle disputes on out-of-network charges, but inconsistencies in how the rule is applied could be an issue, experts said.
The Biden administration issued a major final rule late Friday that detailed the arbitration process for handling out-of-network charges. The rule, which enforces part of the No Surprises Act that outlawed surprise medical bills, is meant to address a series of lawsuits brought by providers that claimed the original arbitration process released last year tilted in payers’ favor too much.
“The department didn’t split the baby,” said Matthew Albright, chief legislative affairs officer for the healthcare technology company Zelis. “I think they gave the providers about 75% of what they wanted.”
The rule attempts to settle a dispute over the independent arbitration process that is triggered when a payer and provider cannot come to an agreement on an out-of-network charge. Both the payer and provider must offer a third-party arbiter their preferred amounts, and the arbiter picks one.
The 2021 interim final rule, however, called on the arbiter to put a major emphasis on picking the amount closest to a qualifying payment amount (QPA), which is the benchmark rate for an out-of-network charge in a geographic area. The rule went into effect Jan. 1 of this year.
But several provider groups such as the American Medical Association (AMA) and the American Hospital Association (AHA) sued over the rule, saying that it contradicted congressional intent by focusing too much on the QPA.
A judge sided with the Texas Medical Association in a similar lawsuit that the rule violated congressional intent and struck key language surrounding the arbitration process. A ruling on the lawsuit brought by the AMA and AHA is on hold.
The new rule now said that the arbiter must weigh the QPA and several other factors such as patient acuity and provider training.
However, the rule itself could bring about inconsistency in arbiter decisions since there isn’t a consistent methodology for weighing the QPA against the other factors, experts said. Albright said that the Department of Health and Human Services may be worried about weighing one factor over another in the rule.
“It is going to be hard to see consistent decisions made because the lawsuits pushed the [independent dispute resolution] entities and the departments into not having a methodology,” he told Fierce Healthcare in an interview.
Having some direction or indication could be an important signal for providers, too.
“There is no way of knowing any ballpark we are in here,” Suzanne Joy, senior public affairs adviser for the law firm Holland & Knight, told Fierce Healthcare.
Joy added that providers will also have to wait to see how the Department of Health and Human Services will audit payers. The agency is now asking for feedback on any additional information that payers should disclose to develop the QPA.
Third-party arbiters should also ensure they are not double counting any information that is already in the QPA. However, there is still uncertainty over how the language against double-counting will be enforced, Joy said.
It remains to be seen whether the rule will be enough to assuage the parties in the lawsuits. The AMA, AHA and Texas Medical Association did not have any comment on the rule when approached by Fierce Healthcare.
Even if the provider groups drop their lawsuits, the administration could face new legal troubles from payer groups. The ERISA Industry Committee, which represents large employers that offer health and other benefits, chided the administration over the rule.
“Instead of adhering to Congress’ original intent, the administration back-tracked on limiting out-of-network payments to reasonable market-driven rates,” said Annette Guarisco Fildes, CEO of the committee, in a statement.