Agencies Release New No Surprises Act FAQs After Adverse Court Ruling

On August 11, 2023, the DOL, HHS, and IRS (“the agencies”) issued FAQs regarding administrative fees charged to group health plans, insurers, and out-of-network providers involved in payment disputes subject to the independent dispute resolution (IDR) provisions of the No Surprises Act (NSA).

An administrative fee is levied against each party to the IDR process. In late December 2022, the agencies increased this fee from $50 per party to $350 for 2023.

The Texas Medical Association (TMA), which has been contesting agency rules promulgated pursuant to the NSA since its inception, challenged the 2023 fee on the grounds that its imposition violated the Administrative Procedure Act’s (APA’s) notice-and-comment requirements. The TMA also challenged the agencies’ restrictions on combining, or “batching,” related claims for resolution altogether in a single proceeding on the same grounds. Generally, the APA’s notice-and-comment requirements prohibit administrative agencies from making final rules without first providing notice of the rules and allowing the public a reasonable opportunity to comment upon them.

As it has on previous occasions, on August 3, 2023, the US District Court for the Eastern District of Texas ruled against the agencies and in favor of the TMA. The court vacated both the fee increase as well as the rule restricting the batching of claims. Accordingly, the agencies suspended the IDR process for a short time thereafter, pending further instructions, which were then provided in the form of FAQs.

The FAQs provide that the administrative fee amount for disputes initiated on or after August 3, 2023, will revert to $50 per party per dispute until further notice and that IDR entities should reissue invoices to parties for open disputes initiated on or after January 1, 2023, through and including August 2, 2023, for which the administrative fees have not been paid.

Notably, however, because the court held that it did not have jurisdiction to order the repayment of paid fees, the FAQs make clear that no refunds will be forthcoming to any parties who have already paid the now vacated $350 fee, even in cases where one disputing party has paid the $350 fee and the other has yet to do so. (In these cases, the nonpaying party will be invoiced for $50).

The FAQs do not address the batching issue. However, a notice on the NSA website indicates IDR entities will resume processing certain disputes, including single and bundled disputes, initiated before the court’s decision. Meanwhile, processing of other batched disputes remains suspended.

This legal development adds further uncertainty to an already backlogged IDR process. Employers with self-insured plans that are involved in payment disputes with OON providers should be aware of this development and monitor for further guidance.