In a recent ruling, the Fifth Circuit Court supported important aspects of the No Surprises Act (NSA), reinforcing provider protections and clarifying how insurers should determine the Qualified Payment Amount (QPA).

This decision not only influences the structure of out-of-network billing disputes but also aims to ensure more transparency and timely payments. Here’s a look at what this ruling means and how aequum can help navigate the changes.

Qualified Payment Amount (QPA) Determination: Ensuring Consistency

The QPA plays an important role in determining fair payments for out-of-network services. This latest court decision supports the Department of Health and Human Services’ (HHS) approach to determining the QPA, which includes specific guidelines on what should be included and excluded:

• Rates from All Providers Count: The ruling permits insurers to include all contracted in-network rates in determining the QPA, regardless of the number of claims paid at those rates.
• Exclusion of One-Time Agreements: The court ruled that special case agreements made outside of standard contracts should not be part of the QPA determination.
• No Bonus Payments in QPA: Performance-based bonuses and other incentives won’t factor into the QPA determination, excluding bonus and other incentive payments typically made after participant cost sharing is determined.

The court’s decision clarified that certain elements previously advocated by providers, such as one-off agreements and retrospective adjustments, will no longer be included in QPA determinations. This change allows health plans to calculate QPAs that more accurately reflect the negotiated rates typically paid to in-network providers.

Additionally, the ruling addresses the issue of “ghost rates”—contracted rates for services that a provider does not actually deliver. For example, an orthopedic surgeon’s contract might include rates for dermatology services they never perform. Excluding such rates ensures that QPAs are not artificially depressed, which helps prevent unfair disadvantages to providers in payment negotiations.

These guidelines help simplify dispute negotiations, as both providers and insurers can rely on a standardized baseline for payment discussions.

Clarifying Timelines: The 30-Day Payment Deadline

The court struck down a provision that allowed insurers to delay payments indefinitely until they receive all information necessary to process as a “clean claim”. The NSA statute requires payors provide an initial payment or denial notice within a firm 30-day deadline from the date a provider submits a bill.

Adherence to statutory timelines is vital, as delays in the IDR process have become a significant issue. Ensuring compliance with the 30-day deadline for initial payments or denials is expected to reduce backlogs and ensure greater consistency within the IDR process.

Transparency in QPA Calculations

Transparent communication on how QPAs are calculated is key to preventing disputes and ensuring fair negotiations.  Insurers must certify that the QPA was determined according to NSA rules. Providers can also request additional information on specific rate factors, such as whether certain rate types or databases contributed to the QPA calculation.

This approach fosters transparency, giving providers the information needed to make informed decisions during dispute reTransparency in QPA determinations allows providers to gain a clearer understanding of the payment methodology. This clarity facilitates fairer negotiations and reduces the likelihood of disputes escalating unnecessarily.

How aequum Supports Providers and Insurers with NSA Compliance

The Fifth Circuit’s decision clarified the QPA determination and timeline requirements.

aequum offers the following NSA compliance resources and support:

• Regulatory Compliance: aequum’s legal team closely monitors NSA developments to help payors and plan sponsors stay compliant with current regulations,
• Claims Dispute Resolution: aequum reviews IDR submissions to exclude any claims that are not eligible for NSA arbitration and to assist payors and plan sponsors in navigating the arbitration process and resolving billing disputes, ensuring fair settlements and reducing administrative burdens.
• Billing and Transparency Guidance: aequum’s team works with payors to improve billing transparency, enhancing the patient experience and minimizing out-of-network billing issues.

 

Although providers have prevailed in 82% of IDR cases, this statistic can be somewhat misleading. Many decisions are default victories due to payors either not participating or failing to submit adequate evidence. The arbitration process is very resource-intensive, highlighting the need for improved compliance and more efficient procedures to reduce the administrative burden.

Administering the NSA adds to plan costs in two ways – paying additional benefits and compliance processing costs. Aequum support ensures compliance and streamlines the dispute process to help payors minimize both benefits and administrative costs.

Implications of Private Equity and Arbitration Trends

Private equity-backed providers play a significant role in many arbitration cases within the IDR process. These organizations often have the financial resources and incentives to navigate the process efficiently while focusing on maximizing revenue.

One notable example is Envision Healthcare, a private equity-backed provider that recently filed for bankruptcy.  Before the NSA’s enactment, Envision heavily relied on surprise billing as a central part of its financial model. The new law has disrupted this strategy, illustrating how the NSA is reshaping the operating environment for private equity-backed providers.

A Step Toward Balance

This ruling is a step toward balancing provider and payor needs under the NSA. While providers may still face challenges in navigating the evolving regulatory landscape, the decision provides clearer guidelines for payment and compliance. As the IDR process and other NSA provisions continue to develop, providers and payors alike must stay informed and proactive.

To learn more about how aequum can support your compliance and billing needs, contact us today.