Knowledge Center

On January 31^st, the Texas Medical Association filed a lawsuit in US District Court challenging the administrative fee increase for the independent dispute resolution (IDR) process to resolve payment disputes between providers and payors under the No Surprises Act (NSA).

While CMS announced in October of 2022 that the IDR non-refundable administrative fee would remain at $50 for the calendar year beginning January 1, 2023, it quietly amended its fee guidance at the end of December 2022 and raised the administrative fee for arbitrations from $50 to $350 citing the rising volume of disputes and among other factors, the need to conduct “pre-eligibility reviews” to address the significant backlog of disputes.

This new lawsuit challenges the increase in this fee on several grounds as the increase multiplies the financial burden for providers to dispute underpayments by payors for services rendered. In certain cases, it would basically impede and foreclose any challenge by an out-of-network provider as the financial burden of the IDR process would exceed the potential recovery of additional reimbursement.

The Association claimed in its first lawsuit that an outweighed consideration was being given to the qualifying payment amount (QPA), or median in-network-contracted insurance rate as the appropriate rate for out-of-network providers. The rules issued by the agencies instructed arbitrators to begin with the presumption that the QPA was the appropriate payment amount. The District Court invalidated this portion of the rule arguing the Act did not instruct arbitrators to weigh any one factor, such as the QPA, more heavily than any other factor. TMA’s second lawsuit continues to challenge how much arbitrators should rely on the QPA when resolving payment disputes while the third suit, filed in December 2022 challenges the methodology for calculating the payments under the IDR process.

This latest suit is filed for declaratory and injunctive relief and would be expected to move quickly to a determination by the Court – we will continue to provide insights and updates related to the challenges impacting out-of-network provider payments under the NSA.

The NSA was a bi-partisan law that aimed to protect patients from unknowingly receiving a medical bill in certain settings. While all parties remain committed to the intent of the law, regulators continue to implement rules that favor the insurance industry. Members of the Committee on Ways and Means have expressed concern by letter to the Departments that the latest rules continue to violate Congressional intent in that the latest instruction regarding the QPA “largely would have the same effect” as the earlier rule regarding a presumption in favor of the QPA.

Please contact us if your practice is experiencing a decline in reimbursements since the implementation of the NSA, January 1, 2022. We offer a flexible, results-based fee structure for handling surprise bill claims in addition to other services to maximize revenue.