The No Surprises Act (NSA) was passed and signed into law at the very end of the first Trump administration in December of 2020, and became effective January 1, 2022. For years prior to its enactment, the law had been the subject of very intense debate, and its enactment was the result of a grand compromise where both sides of the aisle abandoned their initial positions to settle on a middle ground. That middle ground was the Federal Independent Dispute Resolution (IDR) arbitration process, a system which satisfied three critical needs:
- Patients were treated as if a surprise OON medical encounter was in-network (INN) and were left out of the payment dispute between the carrier and the out-of-network (OON) provider,
- The provider was afforded a convenient forum for resolution of the payment dispute, and
- The carrier was removed as the final arbiter of the payment dispute and was replaced by an objective third-party decisionmaker known as the IDR Entity or IDRE.
The IDRE was permitted to look at six factors in its analysis of which party had the more reasonable position in the dispute and had to choose one party’s position over the other with no compromising. This so-called baseball-style arbitration was an additional positive component of the law because over time baseball-style arbitration draws the parties’ positions closer together, rather than further apart as is often the case with processes that allow compromises.
How has the law fared in its implementation after the first 3 ½ years? Not well primarily because of CMS and now the insurance industry.
For the first two years, the law was undermined repeatedly by CMS, the Center for Medicare and Medicaid Services, under the auspices of the Department of Health and Human Services. Here is how:
- The portals to file disputes were not opened until April 2022, so there was four months where arbitrations could not even be filed.
- The QPA (Qualified Payment Amount), which is the required initial payment, which is based on the median INN rate a carrier has for a billed CPT code and which is used to determine the patient’s INN cost-share, was given the benefit of a “rebuttable presumption” in the rules CMS initially promulgated. This was vacated by a federal district court in Texas, which resulted in CMS shutting down the process to re-write the rules. This was the so-called TMA I decision.
- CMS also promulgated rules that called for arbitrations to be filed on a single CPT code basis, rather than as entire claims. A single claim could be for several CPT codes, so this required numerous arbitrations where one arbitration addressing all the codes involved in a single procedure could be arbitrated.
- CMS returned with new rules regarding the QPA, and these too were challenged and vacated by the same federal court as still affording undue favorability to the QPA, when the QPA is supposed to be treated as simply one of the six factors in the arbitration. This is the so-called TMA II decision. This also led to shutdown and delay.
- CMS also grossly underestimated the number of arbitrations, with the result that the IDREs were staffed to handle 17,000 arbitrations in 2022, rather than the 100,000 per quarter they experienced, a more-than 2300% underestimation. The result was completely avoidable delay.
- Effective January 1, 2023 CMS raised the filing fee to arbitrate from $50 to $350, and also raised the arbitrator fees. Combined with the single CPT code requirement, this made numerous claims uneconomical to arbitrate. In 2023, the aforementioned federal court in Texas vacated this cost increase along with the single CPT code requirement, but this was not done until August, again resulting in a shut down while the rules were re-written. This was the so-called TMA IV decision.
In short, it was not until the end of 2023 that all of CMS’s mischief was corrected and the process re-opened as a functioning dispute resolution regime. So, we could expect that in 2024 decisions would be rendered somewhat consistent with the requirements of the NSA, and, in large part, that was true. Decisions began to come in more expeditiously as IDREs staffed up and the rules were settled into something resembling fairness to the medical industry. But not so fast.
The problem now is the blatant ignoring by carriers of their obligations to pay the arbitration awards. Based on the data from one law firm who has been representing the medical community in this area, only 20% of awards are paid within 30 days, as the law requires, after 6 months 80% are paid, and 20% remain unpaid and the unpaid continue to be unpaid beyond a year.
Why? There seems to be no good reason, but some ridiculous ones have been offered.
First, carriers have complained that some of the arbitrations concern claims ineligible for IDR arbitration, such as Medicare or Medicaid or state-regulated claims. Well, carriers have ample opportunity prior to an award to prevent that from happening. They can clearly state on the insurance card or on the explanation of benefits whether a claim is IDR eligible or not. Also, claims are routinely dismissed as ineligible by IDREs as and when carriers inform them that the claim is ineligible. This excuse is disingenuous at best. Nor does this explain why awards that are eventually paid after months of delay are not paid within the required 30 days.
A second reason we have been told is that the carriers are not sure to whom the payment should be sent. This too is disingenuous. They could send it to the party who filed the arbitration, whose contact information the carrier can freely access, or to the medical providers themselves, whose name and address appears on the claim originally sent to the carrier and submitted in the arbitration. They already paid the QPA to someone—did they just guess at who should receive the QPA payment? The notion that the carrier would be unable to determine who should receive the payment is ludicrous.
Another reason apparently is that the carriers—not all—failed to devote resources to the large number of arbitrations filed. Sorry, but large Fortune 500 firms not devoting resources to meet legal obligations should never serve to exonerate those scofflaws. These are companies such as Blue Cross, United Healthcare, and Aetna, who reap hundreds of billions in profit each year.
The travesty of all this lies in the fact that the carriers received so much in the NSA, given the tight administrative timelines to object to payment and file the arbitration as well as the QPA being the initial payment. And they were granted the tremendous advantage of delay for the first two years. But that is not enough apparently. They now want the benefit of ignoring the 30-day timeline imposed on them, after the medical community has been forced to live with its 30-day requirement since the law’s inception. Medical claims are dismissed routinely for failure to meet the 30-day timelines related to bringing the arbitration. Yet, carriers can flaunt with impunity their 30-day requirement.
It should not be permitted now or ever.