Court Strikes Down Rules on Healthcare Billing Dispute Resolution

Healthcare providers and insurers in Arkansas and nationwide face uncertainty about how to resolve payment disputes after a federal appeals court affirmed a lower court’s decision to invalidate certain regulations implementing the No Surprises Act.

Enacted as part of the Consolidated Appropriations Act of 2021, the No Suprises Act shields patients from surprise medical bills for emergency services, out-of-network care provided at in-network facilities, and air ambulance services.

The law establishes an independent dispute resolution process to determine payment amounts for out-of-network services when insurers and providers cannot agree. The law lists several factors that the arbitrator must consider to arrive at the out-of-network rate, such as the provider’s level of training and experience, the severity of the patient’s condition or the complexity of the case, the range of services provided by the facility, and efforts made by the provider or the plan to enter the network. Doctors and other providers in Texas challenged agency regulations that govern how arbitrators should weigh these factors, specifically the requirement that arbitrators prioritize the payment rate established by the insurer, also known as the qualifying payment amount.

In its Friday, Aug. 2, ruling upholding a district court’s decision, the 5th Circuit Court of Appeals concluded that the No Surprises Act does not instruct arbitrators to prioritize any one factor over others and found that the regulations prevented arbitrators from considering information mandated by the law and infringed on their discretion to balance the statutory factors.

As a result of the district court’s decision in this case and others, multiple temporary shutdowns of the independent dispute resolution process occurred to allow agencies to issue new guidance to comply with court orders. Visit the Centers for Medicare and Medicaid Services’ website for the most current guidance documents related to the process.

As we noted in a previous post, Arkansas shares responsibility with the federal government to ensure compliance with the No Surprises Act. Emergency medicine physicians in Arkansas who are out-of-network providers for some insurers recently testified at a Joint Insurance and Commerce Committee meeting meeting at the state Capitol about challenges they face because of the law, including lower payment rates, additional paperwork, increased business costs, and delayed payments to providers. These issues make it difficult to budget on a monthly basis, the physicians testified. They shared a study that found out-of-network payments decreased by an average of 32% after the No Surprises Act took effect. The physicians advocated for legislation to ensure more consistent and timely commercial payments, accountability for automatic denials, and the implementation of electronic systems to expedite negotiations and reviews. They also called for Arkansas to adopt electronic systems similar to systems used in Texas, New Mexico, Illinois, and Oklahoma for faster negotiations and processing.