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No Surprises Act Final Rule Addresses IDR Process, Downcoding

Analysis  |  By Amanda Norris  
   September 21, 2022

Several federal agencies issued a set of final rules based on the No Surprises Act aimed at making it easier for providers to contest payer decisions.

new No Surprises Act final rule and additional guidance to further implement the independent dispute resolution (IDR) process and require payers to provide additional information to providers about qualifying payment amounts (QPA) was recently released by CMS and other federal agencies.

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 QPA could be one of many equally weighted factors considered in payment disputes.

However, until a recent court ruling, 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," and 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."

In the new rules, CMS references the court decision, saying it will "remove the provisions that the District Court vacated." Now IDR entities may weigh QPA and other factors equally in making their decisions.

This is not a full reversal for the QPA's role, though, according to Part B News.

David McLean, a partner with Hall Booth Smith PC in Atlanta told Part B News that "although the final rules do not require the certified IDR entity to select the offer closest to the QPA, the Departments remain of the opinion that it will often be the case that the QPA represents an appropriate out-of-network rate."

However, there is a win for providers when it comes to downcoded claims.

A major plus for providers is the agencies’ decision to require payers to include both an original and an altered QPA for the claim if the payer has downcoded it by switching a code so that the claim is reimbursed at a lower rate.

Now, the payer must not only admit and describe the downcoding but also explain its reasoning, this will then be considered among the factors in the IDR decision. The new rule should help some downcoded providers on price, but it will also create extra work from the IDR entities, Part B News reported.

Extra work is not ideal for IDR entities.

In fact, a recent IDR process status update showed that between April 15 and August 11, the federal IDR portal has received over 46,000 claims, "which is substantially more than the Departments initially estimated would be submitted for a full year." According to the status update, only 1,200 of those claims have received a payment determination.

Clarification on other important No Surprises Act regulations were not covered in these rules, such good faith estimates, but more guidance is expected in the coming months.

Amanda Norris is the Revenue Cycle Editor for HealthLeaders.

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