Final Rule Issued to Implement the No Surprises Act's Independent Dispute Resolution Process

The Centers for Medicare & Medicaid Services and other agencies together issued final regulations concerning the independent dispute resolution process for settling provider-payor disputes over reimbursement for out-of-network services under the No Surprises Act. The Final Rule removes a presumption in favor of the "Qualified Payment Amount" or "QPA" and also addresses provider concerns regarding persistent "downcoding" by payors.

On August 19, 2022, the Departments of Health & Human Services, Labor, and Treasury issued coordinated regulations implementing a Final Rule related to the No Surprises Act (the "Act"). This Final Rule addresses the process by which an Independent Dispute Resolution ("IDR") entity determines the amount payable for out-of-network services covered by the Act when applicable state law does not provide a methodology for determining a payment rate.

The Final Rule follows two Interim Rules, issued in July and October 2021, and two subsequent District Court decisions vacating portions of those Interim Rules with respect to the IDR process. See Texas Medical Association, et al. v. United States Department of Health and Human Services, et al., Case No. 6:21-cv-425 (E.D. Tex.) (February 23, 2022); LifeNet, Inc. v. United States Department of Health and Human Services, et al., Case No. 6:22-cv-162 (E.D. Tex.) (July 26, 2022).

Notably, this Final Rule deviates from the Interim Rules in the following key ways:

  • The Final Rule establishes additional disclosure requirements that payors explain (upon initial payment or notice of denial of payment) why they have "downcoded" a service code on a billed claim to a code associated with a lower reimbursement rate, resulting in lower payment to the provider; and disclose what the "Qualified Payment Amount" (the "QPA") would have been if the payor had not downcoded the claim. 
  • The Final Rule removes the previously proposed presumption that the QPA should be the applicable reimbursement rate for providers, and instead mandates that the IDR entity choose the offer that best represents the value of the disputed item or service, first by considering the QPA and then all permissible information submitted by the parties.
  • The Interim Rules required the IDR entity to explain its payment decision when the IDR entity determined that the QPA was materially different from the appropriate out-of-network reimbursement. The Final Rule further expands this requirement to all payment determinations, regardless if the IDR entity identifies something other than the QPA as the appropriate rate.

Read the Final Rule and the corresponding Fact Sheet.

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