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December 12, 2024 – The No Surprises Act, a law that ended the practice of “balance billing” by certain out-of-network providers, was enacted as part of the Consolidated Appropriations Act of 2021 on December 27, 2020. While the law passed during President Trump’s first term in office, the Biden Administration has been fully responsible for its implementation to date. Come January 20, 2025, that responsibility will shift to the second Trump Administration.
As discussed in a previous Regs & Eggs blog post, implementation of the No Surprises Act is in a period of instability that will carry over to the Trump Administration. With ongoing legal challenges, proposed regulations that haven’t been finalized, and whole provisions of the law that are yet to be implemented, the Trump Administration could have its hands full.
My colleague, Kristen O’Brien, and I highlight four major areas of No Surprises Act implementation that the Trump Administration could decide to focus on in the months ahead.
Multiple court decisions have impacted aspects of the No Surprises Act, including the federal independent dispute resolution (IDR) process. In August 2023, the US District Court for the Eastern District of Texas ruled in two Texas Medical Association (TMA) cases, TMA IV (August 3, 2023) and TMA III (August 24, 2023). The TMA IV decision invalidated the $350 administrative fee that had been established for the federal IDR process as well as some batching regulations. (Batching allows for multiple claims to be included in the same IDR dispute.) The TMA III decision invalidated major portions of the methodology that the US Departments of Health and Human Services, Labor, and the Treasury established for calculating the qualifying payment amount (QPA). Since this decision, these three Departments have exercised enforcement discretion in terms of how the QPAs are calculated, and this lack of guidance has left a lot of grey areas for both plans and providers.
On October 30, 2024, the US Court of Appeals for the Fifth Circuit reversed in part the district court’s decision in TMA III, but affirmed other parts of the decision. While TMA could appeal the Fifth Circuit decision, both the district court and the Fifth Circuit decisions in TMA III could eventually require the Departments to revise the QPA methodology and make other required modifications through new regulation and guidance. New regulation could provide more clarity on how the QPA should be calculated given the outcome of the court decisions. The Departments did state on the Centers for Medicare & Medicaid Services (CMS) website that they are reviewing the “Fifth Circuit’s decision and intend to issue further enforcement guidance in the near future.” While the Departments could put out some guidance during the remaining month of the Biden Administration, any new regulations related to the QPA calculation would need to be drafted under the Trump Administration.
Any potential new QPA regulation under the Trump Administration could make additional changes to the QPA methodology beyond those that have been the subject of litigation. While the courts have provided direction on what is permissible under the No Surprises Act statute and what aspects of the initial regulation can and cannot stand, the rulings do not prevent the Trump Administration from making other permissible regulatory changes as it deems appropriate. All of this means that, if it chooses to act, the Trump Administration could make its own imprint on the current No Surprises Act operations.
Stakeholders have raised concerns over the Departments’ ongoing enforcement of the No Surprises Act requirements. On September 13, 2024, a bipartisan group of US House of Representatives members led by Rep. Greg Murphy (R-NC) introduced H.R. 9572, the Enhanced Enforcement of Health Coverage Act, which would increase penalties for violations of balance billing requirements, add penalties for late payment or nonpayment after an IDR entity payment determination, and add new transparency reporting requirements. While the likelihood of this bill passing is unclear, it could provide a signal for the Trump Administration to focus more on enforcement efforts. The Departments are already required under the No Surprises Act to conduct audits of QPA calculations and may release more of these audits during the Trump Administration.
Notably, CMS releases quarterly enforcement reports, highlighting No Surprises Act complaints that CMS has received against providers and health plans. The latest report includes complaints received as of September 30, 2024. CMS states in the report that “Through the CMS investigation process, CMS has directed plans, issuers, providers, health care facilities, or providers of air ambulance services to take remedial and corrective actions to address instances of noncompliance, which has resulted in approximately $11,301,730 in monetary relief paid to consumers or providers.”
While the quarterly reports offer some insight into the enforcement of the No Surprises Act, they provide an incomplete picture. The breakdown of No Surprises Act compliance complaints only includes entities over which CMS has enforcement jurisdiction. CMS mainly has jurisdiction to investigate No Surprises Act complaints against non-federal governmental plans such as state, county, and local government plans. CMS also has enforcement authority over some fully insured plans in states that have handed over the responsibility of regulating the plans to CMS (Missouri, Oklahoma, Tennessee, Texas, and Wyoming). The CMS reports capture only a subset of the total complaints being received, because some complaints against health plans are adjudicated by states or the Department of Labor.
Thus, from a transparency perspective, some stakeholders think it could be useful for the Trump Administration to issue comprehensive enforcement reports from both CMS and the Department of Labor to provide a more complete picture of how the No Surprises Act is being enforced at the federal level.
As discussed in a previous Regs & Eggs blog post, the Biden Administration has yet to finalize a proposed IDR operation reg that could make IDR process improvements. The reg was initially proposed in October 2023 and would update the IDR fees and requirements around batching disputes. If the Departments do not finalize the reg under the Biden Administration, or only finalize certain parts of it, the Trump Administration could take a look at the reg and decide what policies, if any, it wanted to adopt. Stakeholders believe that many of the reg’s policies, if finalized, would address significant areas of confusion related to the federal IDR process that providers continue to experience.
The district court’s decision in TMA IV required the Departments to update the IDR fees through rulemaking, so the Trump Administration may have to issue a regulation if it wants to adjust the fees at some point going forward.
Although the Biden Administration has implemented some core provisions of the No Surprises Act, it did not implement every provision in the law. In August 2021, the Departments issued a guidance document stating that they did not plan to implementing certain requirements by the statutory deadline of January 1, 2022. As stated in the guidance document, these provisions included:
It is unclear when these provisions will be implemented, as the Departments have not initiated rulemaking on any of them yet. The Departments issued a request for information (RFI) related to the AEOB requirement on September 16, 2022, that sought comments from interested parties on several operational issues that would help the Departments implement the requirement. On April 23, 2024, the Departments issued an update on implementation noting some of the difficulties involved in sharing good faith estimate information between providers, and between providers and health plans. The Departments stated their intention of testing industry-wide standards for data sharing, and stated that they were reviewing comments on the RFI and would work on a proposed reg to implement the AEOB requirement in the future.
It will therefore be up to the Trump Administration to implement or further delay the AEOB requirement and the rest of the provisions highlighted above.
The timing for the Trump Administration to tackle these items is unclear, but key stakeholders believe that it will be necessary for the incoming Administration to address each issue head-on to help end the current period of instability and to enable the No Surprises Act to operate as Congress intended.
Until next week, this is Jeffrey (and Kristen) saying, enjoy reading regs with your eggs.
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