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Department of Labor Reacts to Court Ruling Slashing Part of No Surprises Act

Analysis  |  By Amanda Norris  
   March 11, 2022

The department details the steps it is taking to conform to a recent court order that struck down a piece of the arbitration process in the No Surprises Act.

A federal court in Texas recently ruled in favor of the Texas Medical Association, deciding that HHS was mistaken in its decision to instruct mediators to give past contracted rates between insurers and providers extra weight compared to other factors during the independent dispute resolution (IDR) process within the No Surprises Act.

This ruling sent waves across the U.S., and one of the latest entities to comment is the Department of Labor, which issues the No Surprises Act alongside HHS and the Department of Treasury.

"This court order did not affect any of the departments' other rulemaking under the No Surprises Act. Thus, consumers continue to be protected from surprise bills for out-of-network emergency services, out-of-network air ambulance services, and certain out-of-network services received at in-network facilities," the Department of Labor's memorandum said.

The three departments are collectively reviewing the court's decision and considering next steps, but according to the memorandum the departments will immediately:

  • Withdraw guidance documents that are based on, or that refer to, the portions of the rule that the court invalidated
  • Provide training on the revised guidance for certified IDR entities and disputing parties
  • Open the IDR process for submissions through the IDR portal

During the IDR process, an arbiter is directed to consider all information submitted by the physician and insurer, including the median in-network rate, complexity of the case, previously contracted rates, and market power of the physician and insurance company, among other items.

The law states that the qualified payment amount (QPA) could be one of many equally weighted factors considered in payment disputes.

However, until now, the rule made the QPA the primary factor in the IDR process. Organizations have said that since the QPA is "an unverified rate set by insurers," using it to settle disputes "sets an artificially low benchmark payment, for all care—whether in network or not, which may not support wider access to care—particularly in underserved areas."

This lawsuit does not impact No Surprises Act protections to hold patients harmless during insurer-provider out-of-network payment disputes and will not increase patient out-of-pocket costs.

Related: Piece of Arbitration Process in No Surprises Act Struck Down in Federal Court

Related: No Surprises Act Temperature Check with Revenue Cycle Leaders

Amanda Norris is the Director of Content for HealthLeaders.

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