The “No Surprises Act:” The Law That Never Sleeps

The “No Surprises Act:” The Law That Never Sleeps

The No Surprises Act (NSA) law continues to dominate the news yet again.

While we’re not expecting any imminent sweeping overhauls of the law, we do expect to see noteworthy adjustments stemming from things like lawsuits and rule changes – and the NSA made headlines for both of these recently.

The U.S. Court of Appeals for the 5th Circuit has heard oral arguments in the government’s appeal of the initial ruling in the so-called TMA II case. Just as a reminder, TMA II was filed by the Texas Medical Association (TMA) and a Texas provider with regard to the Final Rule governing how federal independent dispute resolution (IDR) entities consider the qualifying payment amount (QPA) first and foremost when determining a reimbursement amount.

As you may remember, the QPA is based on median network rates, and calculated by insurers. The suit also examines how the rule treats and weighs other factors listed in the statute aside from the QPA. 

The TMA alleges that this QPA-based methodology leads to too-low payments and gives insurers an unfair advantage – and the District Court judge in Texas primarily agreed last February. The Biden Administration appealed, and a three-judge panel in the 5th Circuit listened to both sides last week. 

The TMA particularly argued against the provision in the Final Rule that prohibits arbitrators from considering any factors if they are already accounted for in the QPA, stating that this makes the QPA the baseline from which an arbitrator merely might be persuaded to depart. Reports of the proceedings have indicated that at least one judge was sympathetic to the TMA’s arguments, asking the Administration’s lawyer what the point of having any guardrails at all was if factors besides the QPA are not weighed fairly. The Administration’s lawyer countered that they were mandated by Congress to come up with “reasonable rules of the road,” and that existing rules do just that. The panel will now consider the arguments presented, and likely issue a written decision within the next few months.

The same court will hear the Biden Administration’s second appeal of a TMA lawsuit, TMA III, later this year.

Turning to the rulemaking process, the extended period for the public to submit comments on last year’s proposed rule regarding the IDR process has ended. The American Hospital Association (AHA) released their comment this week, and it too focused at least in part on the QPA. The AHA emphasized how providers and IDR entities should have access to information on how the QPA is calculated – and indeed, this is something that TMA’s lawyers argued in the appeals hearing, calling the QPA a “black box.” Additionally, AHA expressed concern about an alleged lack of oversight when payers fail to pay IDR awards, something that has been the subject of several lawsuits as of late, and about high administrative fees and limitations on batching claims. 

While it might seem that the Biden Administration and the NSA is having a challenging 2024 so far, a recent survey released by America’s Health Insurance Plans (AHIP) and Blue Cross Blue Shield reported that more than 10 million surprise bills were prevented just during the study period of the first nine months of 2023 and that none of the health insurers surveyed reported a reduction in participating providers. In fact, two-thirds of respondents indicated that their provider networks have increased in size since the NSA went into effect.

So, as always with the NSA, it is an ever-changing landscape with a lot of ups and downs. We expect to have many more of these “all-things-NSA” updates for you in the coming months.

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Cate Brantley, JD

Cate Brantley is a legislative analyst for Zelis. She has over 9 years of experience in both the public and private sector. Cate is licensed to practice law in the state of Oklahoma.

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