The Centers for Medicare & Medicaid Services (CMS) has again suspended arbitration of out-of-network payment disputes between providers and payers due to a court order that the agency’s implementation of the No Surprises Act had run afoul of proper notice-and-comment procedure.
The decision stems from a Texas Medical Association (TMA) complaint filed in the U.S. District Court for the Eastern District of Texas back in January. The provider group argued that an increase in administrative fees from $50 to $350 that was implemented earlier that month was “arbitrary and capricious” and would curtail certain physician organizations’ ability to contest a health plan’s reimbursement offer.
The No Surprises Act gives payers and providers 30 days to settle any disputes on an out-of-network charge. If an agreement can’t be reached, both parties submit a preferred amount to a third-party arbitrator, which then chooses one—a process referred to as Independent Dispute Resolution (IDR).
CMS said its fee increase was necessary to cover expenses related to the arbitration process.
Additionally, TMA took issue with CMS’ updated requirement that joint consideration of multiple disputed items and services, a process referred to as “batching,” must be billed under the same or comparable code. The change, which CMS said was made to enable greater efficiency, would force providers to submit for multiple IDR processes, which, combined with the price hike would be prohibitive for certain providers, TMA argued.
In an order signed Aug. 3, Judge Jeremy Kernodle granted-in-part TMA’s motion for summary judgment. The court struck the higher fee and vacated and remanded three portions of the rule outlining the IDR process.
“In sum, the Court holds that the Departments improperly bypassed the [Administrative Procedure Act]’s notice-and-comment requirement in issuing the Fee Guidance and the September Rule’s batching regulations,” Kernodle wrote in the order. “The Court finds that vacatur of these rules is the proper remedy.”
TMA had also sought a refund of previously paid fees and an extension of the IDR deadline, though the judge ruled that the plaintiffs had not done enough to demonstrate that these were warranted under his court’s jurisdiction.
“While the court declined to provide deadline extensions and certain other requested relief, we remain pleased with the overall outcome,” TMA President Rick Snyder, M.D., said in a Friday release. “Yesterday’s decisions on batching rule provisions and administrative fees will aid in reducing barriers to physician access to the law’s arbitration process, which is vital to both patient access to care and practice viability.”
As a result of the decision, CMS wrote in an online notice that it has “temporarily suspended the Federal IDR process, including the ability to initiate new disputes until the Departments can provide additional instructions,” effective immediately.
Fierce Healthcare has reached out to CMS for additional comment on the temporary suspension and what avenue the agency may pursue to restore it.
Implementation of the IDR process has so far been a headache for CMS. TMA has taken the process to task in four different lawsuits, two of which Kernodle ruled in the provider group’s favor while the third, filed in November and taking issue with the contentious method used to determine a “qualifying payment amount,” is still up for grabs.
Kernodle’s judgments had already forced CMS to put the whole process on hold for several weeks earlier this year, marking the second time CMS had been forced to amend the IDR process.
Those hiccups have earned derision from lawmakers disappointed with the staccato rollout of the No Surprises Act. In the administration’s defense, Department of Health and Human Services Secretary Xavier Becerra told legislators in March that the government had received “more than 10 times the number of claims than anyone ever expected,” and noted that most of the disputes appeared to be frivolous due to the low barrier of entry for arbitration claim submissions.
“These arbitrators are swamped,” Becerra told Congress.
