CMS Rule on No Surprises Act Falls Short of Congressional Intent
In an interim final rule issued late last week, the Centers for Medicare & Medicaid Services (CMS) went against Congressional intent in favoring insurance companies with a benchmark payment rate over other factors when it comes to resolving disputes.
Over the last three years as Congress deliberated how to address instances when patients were surprised by a health care bill due to an out-of-network provider, WHA strongly supported the idea that patients should not be caught in the middle, but that to resolve any payment disputes the parties should use an independent arbiter to work out differences.
Although Congress had considered establishing a benchmark rate, instead the No Surprises Act that was enacted last December outlined several criteria an independent arbiter should use to determine the appropriate payment rate. These factors include not just what CMS calls the “qualifying payment amount” (QPA), which is the median in-network rate, but also the level of training, experience, quality and outcomes of the provider; the market share held by the provider and/or the plan; patient acuity; and teaching status, case mix, and scope of services of the provider.
But CMS in its rulemaking process has determined that the single most important factor to be used is the median in-network rate. Under the rule, the arbiter "must begin with the presumption that the QPA is the appropriate out-of-network rate for the qualified [independent dispute resolution] item or service under consideration.” Further, the rule states the arbiter must select the offer closest to the QPA unless they “determine that credible information submitted by either party clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate."
Prior to the enactment of the No Surprises Act, the Congressional Budget Office had projected the fallout of such a move was that the median in-network rates would become a ceiling for negotiations, and eventually function as government-set benchmark rates for providers. This would reward health insurance companies at the expense of hospitals and other providers, which would be forced to accept lower rates or be threatened with being moved out-of-network. The domino effect could lead to fewer in-network providers for patients.
Under the law, providers can't bill patients for out-of-network emergency services or for nonemergency services performed by an out-of-network physician at an in-network facility. HHS issued rules implementing that part of the law earlier this summer with a Jan. 1 start date.
The latest rule was published with an immediate effective date of Oct. 7, 2021. However, CMS is accepting comments on the rule through Dec. 6, 2021. WHA is working closely with the American Hospital Association in pushing back against this rule, given that that it clearly goes against the statute and congressional intent of the bipartisan compromise legislation passed less than a year ago.
This story originally appeared in the October 07, 2021 edition of WHA Newsletter