VACEP, allies, secure win on arbitration guidelines in federal No Surprises Act
IN SHORT
This week, a federal judge in Texas ruled in our favor regarding the process for resolving reimbursement disputes between insurers and physicians. The decision by U.S. District Judge Jeremy D. Kernodle puts emergency medicine one step closer to ensuring a fair arbitration process as part of the federal No Surprises Act.
Background
ACEP led the charge to pass the federal No Surprises Act in December 2020. The law is designed to protect patients from surprise out-of-network bills.
The law created a fair independent dispute resolution (IDR) process in cases where physicians and insurers could not agree on a fair rate. The process requires an arbiter to consider all information submitted by the two parties, including the median in-network rate, complexity of the case, previously contracted rates and market power of the physician and insurance company, among other things.
But the process favors insurers
Although the law intended to resolve payment disputes through this impartial arbitration system, an “interim final rule” released in 2021 by the U.S. Departments of Health and Human Services, Labor, and Treasury created a system that empowers profit-seeking insurance companies to strong-arm local community physician practices, narrow their provider networks and reduce access to care. The Rule inevitably allows insurers to manipulate fair payment standards with little or no transparency on the health plan's calculation of 'median in-network' rates. This harms not just commercially insured patients, but the rural, medically vulnerable and indigent populations who rely on our nation's emergency departments as an important safety net.
Emergency physicians did not agree, and took action.
The Texas Medical Association filed a lawsuit against the U.S. Department of Health and Human Services and four other agencies, challenging the legality of the interim rule.
ACEP also filed a lawsuit against the federal government, arguing that the interim rule goes against the language of the No Surprises Act and will ultimately harm patients and access to care.
In addition, the Emergency Department Practice Management Association (EDPMA), an organization representing the practice of Emergency Medicine, filed an amicus brief, along with Texas ACEP and Virginia ACEP.
What’s an amicus brief? It’s not a lawsuit, but rather, offers additional support and relevant information related to a lawsuit — in this case, the one by the Texas Medical Association.
What the amicus brief says
The amicus brief focuses on the process for resolving reimbursement disputes between insurance plans and physicians, with special emphasis on the adverse effects the Rule threatens to have on the delivery of emergency care.
Early legislative proposals for the No Surprises Act that relied on a benchmark set at the plan's typical in-network rate were rejected in favor of a compromise that considered evidence submitted by both the plans and the physicians. The statute clearly provides that the arbiter "shall consider" eight factors before deciding appropriate payment.
The interim final rule inappropriately prohibits the arbiter from considering seven of those required factors except in special circumstances. Instead, it requires the arbiter to pick the rate that is closest to the plan's median in-network rate (a rate which is completely non-transparent to physicians).
Throughout the legislative process of creating the No Surprises Act, everyone agreed that patients should be removed from billing disputes and held only to their in-network cost-sharing amounts. EDPMA and the ACEP chapters strongly support the patient protections. The lawsuit and amicus brief do not challenge these protections.
Judge rules in favor of emergency physicians
On February 23, the Texas federal Judge Kernodle ruled for summary judgement and denied the federal government request for cross motions.
What’s that mean? U.S. Health and Human Services now has to go back and re-draw up the implementation guidelines for the arbitration process and ensure that all of the criteria — not just the picking the rate closest to the plan’s median in-network rate — is considered.
