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AAMC, Others File Amicus Brief Challenging IDR in No Surprises Act

December 17, 2021

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CONTACTS
Ivy Baer, Senior Director and Regulatory Counsel

The AAMC and other hospital associations filed an amicus brief in the U.S. District Court for the District of Columbia on Dec. 15 in the case brought by the American Hospital Association (AHA) and the American Medical Association (AMA) that challenges the independent dispute resolution (IDR) process of the No Surprises Act (P.L.116-260) from going into effect Jan. 1, 2022.

The AAMC previously submitted comments in response to the related surprise billing part II interim final rule issued by the federal departments charged with enforcing the Act — the Departments of Labor, Treasury, and Health and Human Services, and the Office of Personnel Management [refer to Washington Highlights, Dec. 10]. While the AAMC supports the purpose of the No Surprises Act to ensure that a patient’s financial obligation is the equivalent of in-network coverage and cost-sharing obligations, the hospital associations, as well as  members of Congress, believe that the method adopted by the federal departments to be used when there is a dispute between the provider and insurer is not supported by the statute and will be harmful to patients and providers [refer to Washington Highlights, Nov. 12]. The amicus brief provides support for the injunctive relief requested by the AHA and the AMA to stop the IDR process from going into effect.

The IDR process can be used after the patient’s cost-sharing obligation is determined if there is a disagreement between the insurer and provider on the amount the insurer should pay for the care. Contrary to what is set out in the law, the interim final rule calls for the median in-network rate, known as the qualified payment amount (QPA), to be used to determine the payment that the provider will receive.

The brief recounts the nearly two years of hearings and negotiations that occurred in Congress before the No Surprises Act was enacted and discusses the compromise that was reached regarding the IDR process. The legislative history demonstrates that Congress rejected a benchmarking methodology for the IDR process and instead opted for a method that considers a number of factors including teaching status, patient acuity, case mix, and scope of services of the facility providing the care. The brief argues that making the QPA the presumptive amount in the IDR process “creates diminished incentives for insurers to maintain and expand provider networks, narrowing existing networks and thus providing fewer in-network choices for patients. And it will artificially reduce insurer payments to hospitals and physicians, undermining their ability to provide the same level and range of services.”

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