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August 26, 2022

U.S. Issues Final Rules Implementing No Surprises Act and Modifying Dispute Resolution Process

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Key Takeaways

  • The IDR process seeks to ensure transparency in the qualifying payment amount (QPA) calculation process as it relates to the practice of “downcoding."

On August 19, 2022, the U.S. Departments of Labor, Treasury, and Health & Human Services issued final rules entitled, "Requirements Related to Surprise Billing: Final Rules," which modify the independent dispute resolution (IDR) process implemented under the No Surprises Act. 

The No Surprises Act (the Act), enacted as part of the Consolidated Appropriations Act, 2021 (CAA), created novel protections against out-of-network balance billing and established an IDR process for resolving payment disputes between certain providers and health plans when they are unable to agree upon an appropriate price for out-of-network services.  Following challenges in the Eastern District of Texas - which resulted in the court vacating key aspects of the interim rules governing dispute resolution - the Departments issued their new regulations finalizing portions of the previous rules on the controversial IDR process. 

Under the new rules, the IDR process seeks to ensure transparency in the qualifying payment amount (QPA) calculation process as it relates to the practice of "downcoding," which occurs when plans and issuers manipulate the QPA by using different service codes than the codes providers originally used in billing.  Employers and sponsors of group health plans should prepare themselves to implement and comply with these new rules by consulting with claims administrators and counsel.

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