Fifth Circuit Stays Proceedings in Case Vacating Portions of No Surprises Act’s IDR Regulations

At the request of the IRS, DOL, and HHS, the Fifth Circuit has put a hold on the agencies’ appeal of the trial court case vacating key portions of the interim final regulations implementing the independent dispute resolution (IDR) provisions of the No Surprises Act, enacted as part of the Consolidated Appropriations Act, 2021 (CAA). As background, this portion of the CAA is intended to shield individuals from surprise medical bills for emergency services, air ambulance services furnished by nonparticipating providers (i.e., out-of-network providers or other providers that do not have contractual relationships with the plan), and non-emergency services furnished by nonparticipating providers at in-network facilities in certain circumstances (see our Checkpoint article). The agencies jointly issued two sets of interim final regulations addressing, among other things, participant cost-sharing for services subject to the CAA, in most situations using the qualifying payment amount (QPA), which is based on the plan’s median in-network rate (see our Checkpoint article). The regulations also address procedural aspects of plan payments of the out-of-network rate to nonparticipating providers and explain the role of certified IDR entities, the parties’ submission of proposed payment amounts, and factors certified IDR entities may consider in selecting a party’s payment amount (see our Checkpoint article).

Providers challenged the portions of the regulations that effectively create the presumption that the QPA is the appropriate out-of-network rate for determining the payment amount, and a trial court invalidated provisions that prioritize the QPA over other factors in determining the out-of-network rate (see our Checkpoint article). The agencies issued a memorandum in response to the trial court’s ruling, announcing that they were “reviewing the court’s decision and considering next steps.” The agencies appealed the decision to the Fifth Circuit; however, at their request the court has now stayed the proceedings pending ongoing rulemaking.

EBIA Comment: This development adds to the lingering uncertainty about the role of the QPA in the surprise billing IDR process. As we wait for future IDR rulemaking, keep in mind that the agencies have already revised their IDR process guides in response to the trial court’s decision and announced that the IDR Portal is open (see our Checkpoint article). Thus, notwithstanding the uncertainty created by the court’s decision, the IDR process is “live.” Plans will need to be prepared for the short and strict timelines and other aspects of the IDR process recently highlighted in FAQ guidance (see our Checkpoint article). For more information, see EBIA’s Health Care Reform manual at Section XII.B.3 (“Surprise Medical Billing: Emergency and Non-Emergency Services”). See also EBIA’s Group Health Plan Mandates manual at Section XIII.B (“Patient Protections”) and EBIA’s Self-Insured Health Plans manual at Section XIII.C (“Federally Mandated Benefits”). You may also be interested in our webinar “Surprise Billing Protections Under the No Surprises Act: What Group Health Plans Should Know” (recorded on 5/11/2022).

Contributing Editors: EBIA Staff.