CMS Lowers No Surprises Act Fee After Court Nixes Price Hike

CMS Lowers No Surprises Act Fee After Court Nixes Price Hike
CMS Lowers No Surprises Act Fee After Court Nixes Price Hike

CMS said Friday that it will lower the administrative fee that providers and insurers must pay when initiating a reimbursement dispute under the No Surprises Act.  

This move came a week after the Texas Medical Association won its third court case challenging HHS about provisions within the No Surprises Act — this one took issue with the 600% price hike that the department imposed on the fee for beginning the independent dispute resolution (IDR) process.

The No Surprises Act, which was signed into law in December 2020, is meant to protect Americans against surprise medical bills. Under the law, patients cannot be billed out-of-network rates for care they sought in an emergency. Instead, patients only have to pay their in-network cost-sharing amounts. The law also established a process for IDR when providers and payers can’t agree on the appropriate reimbursement rate. The No Surprises Act requires an independent mediator to review the case and determine the fair payment amount in these scenarios.

In October, CMS said the administrative fee for initiating the IDR process would remain $50 in 2023. But then in December, the agency announced it would increase the fee to $350 beginning in January 2023. CMS said it raised the fee “due to supplemental data analysis and increasing expenditures in carrying out the federal IDR process since the development of the prior 2023 guidance.”

The Texas Medical Association filed a lawsuit against HHS in January over the fee hike.

“The Departments’ dramatic and surprise increase in the cost of accessing IDR — announced less than two months after CMS confirmed that the administrative fee would remain $50 in 2023, and only four business days before the fee increase took effect — not only will make the process significantly more expensive for all IDR participants but will make it cost-prohibitive for many providers to access IDR at all,” the complaint said.

On August 3, a Texas federal judge vacated the $350 fee. In his ruling, U.S. District Judge Jeremy Kernolde said that HHS did not follow the notice and comment requirements needed when raising administrative fees for providers and payers. As a result of the ruling, HHS temporarily suspended the federal IDR process, including the ability for providers and payers to initiate new disputes.

On Friday, CMS released an FAQ document concerning the No Surprises Act’s IDR administrative fee. In the document, the agency said that the fee amount for disputes initiated on or after August 3 would revert back to $50. 

The $50 fee will also apply to all unpaid disputes that were initiated before August 3. But if a dispute initiated between January 1 and August 2 has already been paid, Kernolde’s ruling does not require CMS to refund the parties that paid the $350 fee.

CMS’ federal IDR portal, where providers and payers can initiate new disputes, remains closed. In its FAQ document, the agency said it intends to “reopen the portal to permit the submission of new disputes soon and will notify interested parties at that time.”

Photo: gustavofrazao, Getty Images

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