August 29, 2022

“The waiting is the hardest part,” according to legendary rocker Tom Petty.  Well, we have waited for many months to see what is supposed to be the final version of the government’s stance on implementing the No Surprises Act (NSA).  That wait appears to be over . . . well, sort of.  On August 17, the federal departments tasked with promulgating rules relative to the NSA [Health and Human Services (HHS), Labor and Treasury, hereinafter, “the Departments”] issued a final rule that will have a direct effect on anesthesia practices.

Last week’s alert provided our readers with a historic background on the various interim final rules of 2021, the subsequent court cases filed and adjudicated, as well as other recent developments concerning the implementation of the NSA.  As we have now had a chance to review this most recent rule, it is our purpose herein to bring you a summary of its key provisions, especially those with import to the anesthesia specialty.  What has been changed since the previous rules?  Does this final rule comport with the recent federal court decision in Texas?  How does this latest iteration of rulemaking impact anesthesia groups?  We will attempt to answer these questions below.

Mandated Disclosures by Payers

The July 2021 interim final rule required health plans to disclose to providers the qualifying payment amount (QPA)—which we discussed in our previous alert—for each service, where the QPA serves as the amount upon which cost-sharing is based.  To ensure that providers have the information they need to engage in meaningful open negotiations, the August 2022 final rule (FR) creates a definition of the term “downcode” and requires that health plans disclose additional information if they downcode a billed claim.

Although “downcoding” is being defined for the first time in the FR, the concept was reflected in both sets of interim final rules.  Though neither set of interim final rules specifically defines a term for this practice, they did describe the practice and explained that it was permissible under certain circumstances.  The August, 2022 FR defines the term “downcode” to mean the alteration by a health plan of the service code to another service code or the alteration, addition, or removal by a health plan of a modifier, if the changed code or modifier is associated with a lower QPA than the service code or modifier billed by the provider.  If a QPA is based on a downcoded service code or modifier, the plan or issuer must provide the following with its initial payment or notice of denial of payment:

• A statement that the service code or modifier billed by the provider was downcoded;
   
• An explanation of why the claim was downcoded, including a description of which service codes or modifiers were altered, added, or removed, if any; and
   
• The amount that would have been the QPA had the service code or modifier not been downcoded.

Payment Determinations Under the IDR

As you will recall, the October 2021 interim final rule required that certified independent dispute resolution (IDR) entities select the offer closest to the QPA, unless the certified IDR entity determined that any additional credible information submitted by the parties demonstrated that the QPA was materially different from the appropriate out-of-network rate. A federal district court in Texas vacated this requirement in rulings handed down earlier this year.  Accordingly, the FR reflects the removal of this QPA requirement by the court.  Instead, the FR specifies that certified IDR entities should select the offer that best represents the value of the service under dispute after considering (a) the QPA, and (b) “all permissible information submitted by the parties.”

So, let’s underscore the above as it represents the primary change in federal policy that anesthesia providers have been anticipating since earlier this year.  Under the FR, certified IDR entities are still required to consider the QPA but must then also consider all additional permissible information submitted by each party to determine which offer best reflects the appropriate out-of-network rate.  Well, what constitutes “permissible information?”  According to an FR fact sheet released by the Departments, the additional information may not include information prohibited by the statute.  Certified IDR entities are directed by the FR to evaluate whether the information received relates to the payment amount offer submitted by either party and whether the additional information is credible. The fact sheet goes on to state:

The certified IDR entity should also evaluate the information to avoid double counting information that is already accounted for by the QPA or by any of the other information submitted by the parties.  After weighing these considerations, certified IDR entities should then select the offer that best represents the value of the service under dispute.

So, while the QPA is no longer the primary driver for determining what the payment for a disputed service will be, it is still an important factor in the IDR process.  It remains to be seen if this nuanced reworking of the QPA requirement within this latest rule will have any meaningful impact in how payments are determined within the IDR process.  Some will also question the extent to which the FR will slow down or turn around payers’ efforts to lower anesthesia contract rates. 

A final question surrounding this topic is whether the August FR marks the government's last word on this topic.  After all, there are still lawsuits over the interim final rules that must still be adjudicated, and some have suggested that this latest rulemaking effort may not go far enough to comply with the Texas court’s directive and the original intent of the statute, especially in terms of its emphasis on the QPA.  On August 25, the American Society of Anesthesiologists (ASA) released the following statement:

The American Society of Anesthesiologists (ASA) is disappointed that the Surprise Billing Final Rule fails to protect patient access to their chosen providers and enables insurers to inflate profits at patient and provider expense.  The independent dispute resolution (IDR) process outlined in the final rule still does not match the statutory description in the No Surprises Act. The rule skews the IDR process to favor the insurer-calculated Qualifying Payment Amount (QPA) over other factors Congress specifically directed IDR arbitrators to consider equally with the QPA.  This flawed approach will further embolden profit-driven insurance companies to drive community physician practices out of network if not out of business. Blue Cross Blue Shield of North Carolina and Blue Cross Blue Shield of Tennessee have cited the new law when demanding providers accept drastic reimbursement cuts for services provided or risk contract termination.

So, it’s clear that not everyone is happy with this latest rule—not the least of which is the ASA, a current litigant in an ongoing lawsuit relative to this matter.  To what extent will the impending court rulings require further rulemaking by the Departments?  While we have now received the government’s current position, anesthesia providers may need to remain in a wait-and-see mode, as there may be more to come.

To review the full August FR fact sheet released by the U.S. Department of Labor, you can click on the following link: https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/requirements-related-to-surprise-billing-final-rules-2022.pdf.  The 146-page Final Rule can be viewed here: ebsa1210-ac00-and-1210ab99-idr-process-final-rule-dol816-final.pdf.  For a set of government-issued FAQs, click on the following link: aca-part-55.pdf (dol.gov).  As these FAQs are quite extensive (28 pages), we encourage you to review them carefully.  If you have questions for us, please go to info@anesthesiallc.com.

With best wishes, 

Tony Mira
President and CEO