Fifth Circuit Grants Stay of Surprise Billing Appeal

The IRS, DOL and HHS recently asked the Fifth Circuit to stay an appeal they had filed on the Texas federal court case vacating key parts of the independent dispute resolution (IDR) process in the No Surprises Act (NSA) interim final rule. The court granted the hold to pause the legal challenge on May 3.

In the Texas federal court case, the plaintiffs challenged the rule’s presumption that the qualifying payment amount (QPA), which is the median contracted rate for an item or service for a geographic region, is the correct out-of-network (OON) payment amount. Specifically, they argued that such a presumption is inconsistent with the NSA statutory language, which allows for equal consideration of the QPA and other factors (e.g., the provider’s level of training and experience, patient acuity, case complexity) when determining the OON payment rate. Furthermore, the plaintiffs asserted that the defendants improperly circumvented the required notice and comment process when issuing the rule. (For more information on the court ruling, please see our prior article.)

The NSA provisions apply to both insured and self-funded group health plans and are effective for plan years beginning on or after January 1, 2022. Amongst other items, NSA provisions protect participants from surprise bills for OON emergency and air ambulance services, as well as certain OON services received at in-network facilities. The NSA limits participant cost-sharing for covered OON services, leaving plans and insurers to address the balance of the bill from an OON provider. In states with an applicable All-Payer Model Agreement or specified state law, the OON provider rate is determined by the Model Agreement or state law. (For more information on the rule, please see our prior article in the October 14, 2021, edition of Compliance Corner.)

Until the agencies issue future IDR rulemaking, employers should keep in mind that the agencies have already revised their IDR process guides because of the Texas federal court’s decision to require the certified IDR entity to consider additional credible information in addition to the QPA. Further, the Federal IDR Portal is already live (For more information on the revised IDR process guides, please see our prior article in the April 28, 2022, edition of Compliance Corner.)

Texas Med. Assoc. v. HHS, 2022 WL 542879 (E.D. Tex. 2022); on appeal to 5th Cir., No. 22-40264, Doc. 00516304229 (May 3, 2022) »