On Friday, August 19th, the U.S. Departments of Labor, Health and Human Services, and Treasury (“the Departments”) released a final rule, revising certain provisions from the July and October 2021 interim final rules that had previously been issued to implement the No Surprises Act. The final rule includes important alterations to the previously issued interim final rules. Here are 3 key areas of importance:
- The Departments Place New Obligations on Health Plans Regarding of Provision of the QPA for “Downcoded” Claims
In response to the advocacy efforts of EDPMA and its partners, the Departments recognized the negative impact that the payer practice of inappropriate downcoding can have on the basic fairness of Federal independent dispute resolution (IDR). To address these concerns, the Departments took several steps. -
- The Departments codified their previously articulated definition of “downcoding” as “the alteration by a plan or issuer of a service code to another service code, or the alteration, addition, or removal by a plan or issuer of a modifier, if the changed code or modifier is associated with a lower qualifying payment amount than the service code or modifier billed by the provider, facility, or provider of air ambulance services.”
- The Departments finalized that for claims to which the No Surprises Act is applicable, if a plan or issuer downcodes a claim that when the plan or issuer issues the initial payment, the plan or issuer must:
- Provide a statement that the service code or modifier billed by the provider, facility, or provider of air ambulance was downcoded
- Provide an explanation of why the claim was downcoded (including a description of which codes were altered/removed/modified)
- Provide the amount that would have been the QPA had the downcoding not occurred.
After extensive advocacy by EDPMA and others on this issue, the Departments acknowledged that these requirements were necessary because “it is important for providers and facilities to know whether the plan or issuer has downcoded a particular claim that is subject to the balance billing protections in the No Surprises Act to ensure that providers receive information that may be relevant to the open negotiation process and that could inform a provider’s offer in the Federal IDR process, and which the provider has no other means of ascertaining.”
- The Departments Formalized Past Guidance Making it Clear that Plans/Issuers Cannot Force Providers/Facilities to Initiate Open Negotiation Via Payer-Controlled Mechanisms
After EDPMA and its partners informed the Departments of the frequent health plan practice of attempting to force providers and facilities to use health plan-created portals in order to initiate the “open negotiation” phase of payment resolution created under the No Surprises Act, the Departments affirmed their past guidance which makes clear that plans cannot require that providers utilize any method or mechanism other than proper submission of the standard Initiation of Open Negotiation form as articulated under the Departments’ rules in order to properly initiate open negotiation. In this final rule, the Departments directly state, “if a provider, facility, or provider of air ambulance services sends the standard notice of initiation of open negotiation to the email address identified by the plan or issuer in the notice of denial of payment or initial payment, that transmission would satisfy the regulatory requirement to provide notice to the opposing party (so long as the provider, facility, or provider of air ambulance services also sends the notice free of charge in paper form upon request).”
The Departments acknowledged that health plans can encourage use of portals and other web-based mechanisms but went on to state that “a plan or issuer cannot refuse to accept the standard notice of initiation of open negotiation from a provider, facility, or provider of air ambulance because the provider or facility did not utilize the plan’s or issuer’s online portal when the standard notice of initiation of open negotiation is provided in a manner consistent with the requirements of the July 2021 and October 2021 interim final rules.”
- The Departments Responded to the TMA Litigation Outcome By Retracting its “Presumptive” QPA Policy But Finalizes Other “Additional Information” Evaluation Standards
Throughout the final rule, the Departments acknowledge the outcome of the court ruling in favor of the Texas Medical Association. In doing so, the Departments rescinded the previous policies that the qualifying payment amount (QPA) is a presumed appropriate payment amount as well as striking the provision that directed arbiters to select the IDR offer that was closest to the QPA. The Departments explicitly state, “these final rules do not require certified IDR entities to default to the offer closest to the QPA or to apply a presumption in favor of that offer.”
In its place however, the Departments finalized notable provisions that serve to bolster the relevance of the QPA in Federal IDR.
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- First, the Departments finalized that any “additional information” that is submitted by the disputing parties must meet its standard as “credible” and that certified IDR entities must evaluate whether the “additional information” submitted “relates to” the offer in order to be considered as part of the payment determination along with the QPA.
- Second, the Departments finalized a new policy that certified IDR entities must avoid considering “additional information” that could result in “double counting.” The Departments state, “The certified IDR entity should consider whether the additional information is already accounted for in the QPA and should not give weight to information related to a factor if the certified IDR entity determines the information was already accounted for in the calculation of the QPA, to avoid weighting the same information twice,” as well as that “if the parties submit information related to more than one of the additional factors, the certified IDR entity should consider whether the information submitted regarding those factors is already accounted for by information submitted relating to other credible information submitted to the certified IDR entity in relation to another factor and, if so, should not weigh this information more than once.”
As members are digesting the content of the final rule, EDPMA is actively listening to its membership and hears the concern about the new “double counting” standard that seems to be insufficiently-defined, poorly-conceived, duplicative of common sense, and therefore, subject to manipulation by the health plans. Further, because the Departments are requiring a written rationale from the certified IDR entities every time they consider “additional information” as to why that additional information was not accounted for elsewhere, we understand our membership is extremely concerned that the Departments have provided certified IDR entities with an incentive to dismiss legitimate “additional information” simply because the already-stressed certified IDR entities seek to avoid the administrative burden of providing a written defense of how and why “additional information” used for making the payment determination does not result in double counting.
A link to the full rule can be accessed via this link. EDPMA, as part of the EDPMA/ACEP steering committee, is continuing to analyze the new provisions and consult with partners on next steps. We will keep you updated with additional advocacy efforts and opportunities.