House Committee Requests Changes to Final Surprise Billing Rule

November 29, 2022 - Leaders of the House Committee on Ways and Means have voiced concerns that the final surprise billing rule on the independent dispute resolution (IDR) process continues to violate the No Surprises Act.

Committee Chairman Richard Neal (D-MA) and Ranking Member Kevin Brady (R-TX) penned a letter to the departments of Health and Human Services, Labor, and the Treasury, urging them to revisit the rule.

The interim final rule on surprise billing stated that IDR entities must use the qualifying payment amount (QPA)—the payer’s median contracted rate for an item or service—when determining reimbursement rates for out-of-network services.

The No Surprises Act states that IDR entities should consider the QPA along with other factors, such as provider training and experience, the provider’s market share, and how difficult it was to furnish the service.

The interim final rule received legal pushback, as stakeholders claimed that the IDR requirements did not align with what Congress wrote in the No Surprises Act.

The Biden Administration released the final regulation in August 2022, which aimed to amend the emphasis placed on the QPA during the IDR process. However, the Committee members have expressed concern that the final rule still violates the No Surprises Act.

“Despite a federal district court correctly ruling that aspects of the interim final regulation were flawed in its implementation of the IDR requirements, we are severely disappointed to find that the August 2022 final rule violates the No Surprises Act in the same ways as before,” the letter stated.

“Although the final rule makes some limited progress by no longer designating an unlawful ‘rebuttable presumption’ towards the QPA as the interim final rule did (which a federal district court properly invalidated), we find that the new instruction to IDR entities largely would have the same effect.”

The new final rule directs IDR entities to “consider whether the additional information is already accounted for in the QPA,” creating a double counting test. In addition, the rule says that IDR entities should not give weight to a factor if the information was already accounted for in the QPA calculation.

According to the Committee, these directions continue to skew the determination of the IDR process toward the QPA.

“Even though the No Surprises Act explicitly requires an IDR entity to separately consider all of the statutory factors, the final rule precludes IDR entities from giving weight to factors like patient acuity and the complexity of furnishing the item or service at issue unless providers meet the heightened burden of disproving double-counting within the QPA,” the members wrote.

In addition, factors like market share could fail the double counting test as it could inform an IDR entity’s decision but may also be a variable in the QPA calculation. The double counting instruction fails to acknowledge that neither providers nor IDR entities can accurately evaluate the QPA to determine whether other factors are already accounted for, the letter stated.

The Committee members also pointed out the slow implementation of the Advanced Explanation of Benefits (AEOB) provision of the No Surprises Act. Per the law, the Departments are supposed to implement AEOB requirements by January 1, 2022. However, the Committee is concerned that implementation will be delayed until 2024, given the Departments’ recent request for information.

The letter emphasized that patients deserve access to the transparency included in the No Surprises Act and urged the Departments to accelerate the enforcement of the AEOB provision.

“We ask that you swiftly revisit portions of the August 2022 final rule to ensure it aligns with the law as written and take immediate steps to make the law’s transparency provisions a reality for patients,” the letter concluded.