Medical Professionals Challenge No Surprises Act’s IDR Process

Under the No Surprises Act, patients are protected from surprise medical bills if they receive out-of-network emergency care, out-of-network air ambulance services, or services from an out-of-network medical providers working at a network facility. Under these circumstances, the patient will pay what he would pay if he had received care in-network. The amount a health plan must pay the provider for the service, however, is less concrete.

Under the Act, the provider and health plan first negotiate over what is an acceptable payment. If they reach an impasse, the reimbursement amount will be decided by an independent dispute resolution (“IDR”) process. The provider and the plan each submit an offer, and the IDR entity selects the most reasonable amount. When making its decision, the Act states that the IDR entity should consider different factors, including the median network rate for the service, the training and experience of the provider, and the market share of the parties.

The American Medical Association and the American Hospital Association have filed a suit in the District of Columbia District Court to challenge the interim final rule issued by the Departments of Health and Human Services, Labor, and Treasury that relate to the IDR process. The rule essentially provides that the median network rate is the default correct amount. Other factors can only be considered if a party submits “credible information” about them. Additionally, the offer further from the median network rate will only be selected if the party shows that the network median rate is “materially different from the appropriate out of-of-network rate.”

The plaintiffs argue that this aspect of the Rule contradicts the No Surprises Act, which does not state that the median network rate is the de facto correct payment. They also allege that the Rule favors health plans and insurers, who are responsible for calculating the median network rate. The plaintiffs are asking the court to enjoin the government from enforcing this provision of the Rule, which is unlikely to happen before the January 1, 2022, effective date of the No Surprises Act.