EDPMA Files An Amicus Brief To Support The TMA III Appeal

The TMA III appeal concerns the Departments’ July 2021 Interim Final Rule regarding calculation of Qualifying Payment Amounts (“QPAs”), as well as payors’ disclosure obligations regarding their QPA calculations. The district court decision addressed two aspects of the July Rule.

First, the district court vacated certain provisions of the July Rule dealing with the actual calculation of the QPA: (1) the inclusion of “ghost rates” in QPAs; (2) the exclusion from the QPA of risk-sharing, bonus, and other incentive-based or retrospective payments; (3) the inclusion of out-of-specialty rates; and (4) the inclusion of other plan sponsors’ rates.  On appeal, the Departments did not challenge the district court’s vacatur of the third and fourth provisions, other than to appeal the district court’s decision to order “universal vacatur” applying to parties beyond the TMA III case. That leaves ghost rates and incentive payments at issue on this appeal.

Further, EDPMA and its members continue to advocate for HHS’ enforcement and guidance on these two vacated elements to ensure go-forward QPA calculations adhere to single specialty requirements while prohibiting TPAs from using rates from other self-funded plans they administer.  In fact, questions to ensure compliance with these elements were recently posed by U.S. House Ways & Means committee members to Secretary Becerra at a recent budget hearing.

Second, the district court disagreed with TMA and did not vacate the July Rule’s disclosure and transparency provisions for insurers regarding their calculation of the QPA. TMA is cross-appealing that portion of the district court’s ruling.

EDPMA’s amicus brief supports TMA’s position on both the Departments’ appeal and on TMA’s cross-appeal.

First, EDPMA argues that the July Rule’s provisions regarding calculation of the QPA are contrary to the unambiguous language and legislative intent of the No Surprises Act (“NSA”). The intent of the NSA was not only to protect patients from “surprise” medical bills, but also to ensure fair and reasonable reimbursement rates to out-of-network physicians. The challenged provisions of the July Rule regarding calculation of QPAs skew the QPA unfairly downward and result in significantly below-market rates for physicians.

Second, EDPMA argues that the district court erroneously declined to vacate the July Rule’s insurer disclosure obligations. The July Rule fails to require insurers to provide basic, material information to physicians that would enable them to evaluate the QPA and make informed decisions about the offers they should submit in the IDR process, or even whether to invoke IDR at all.

Third, in addition to the legal arguments noted above, EDPMA informs the Court about the real-world consequences of the Departments’ implementation of the NSA. In so doing, EDPMA relies on a variety of reports and studies of the NSA and the IDR process, including some truly outstanding work done by EDPMA.

For example, an EDPMA study, among others, show that out-of-network reimbursements to emergency physicians have actually decreased since implementation of the NSA 92% of the time, with an average decrease in payment of more than 32% for each emergency room visit.  Moreover, the significantly below-market QPAs as calculated by insurers have resulted in enormous backlogs in the IDR process, resulting in further delays in payments to physicians. EDPMA also describes how the July Rule’s weak disclosure and transparency obligations of insurers regarding their calculation of the QPA have left physicians in the dark about the process.

The Departments have done little to enforce those disclosure obligations or to audit the IDR process. EDPMA also describes how the Departments’ implementation of the NSA has resulted in a dramatic contraction of provider networks―directly contrary to the intent of Congress. Insurers have been emboldened by the Departments’ regulations and have terminated longstanding network agreements or forced physicians to accept substantial discounts from their contracted rates. Thus, contrary to the Departments’ assertions that it is the “business model” of emergency medicine groups to “remain out of network,” it is insurers that have been forcing physicians out of network. The brief also notes that while physicians generally have been adversely affected by the Departments’ rules, emergency physicians have been particularly affected by them, especially given their obligations under EMTALA to treat all emergency room patients, regardless of their insurance status or ability to pay.

Perhaps most important, EDPMA’s brief is not limited to describing the harm to physicians from inadequate reimbursement.  The brief also demonstrates that the Departments’ rules adversely affect patients and have exacerbated the existing crisis in the emergency medicine delivery system. The burden of shouldering uncompensated and undercompensated care has resulted in the closing of emergency rooms or the downgrading of services, thereby potentially crippling the nation’s healthcare safety net, particularly in rural and underserved areas. The Departments’ implementation of the NSA will serve only to worsen this situation. Read Here.