The No Surprises Act continues to bring surprises.

When the act passed in 2021, it had the express goal of making patients’ lives easier when it comes to billing. On CMS’ website outlining the act, they say the bill is supposed to end “surprise medical bills and remove consumers from payment disputes between a provider or health care facility and their health plan.”

We’ve previously detailed various issues with the bill’s implementation, but in general, it’s safe to say that the NSA was a little more complicated than CMS’ simple description implies.

To start, part of the bill attempted to streamline and standardize how costs of procedures were determined. To do this, the bill stated that arbitrators in the IDR process had to primarily consider the Qualifying Payment Amount (QPA), then consider other factors as they felt appropriate.

This, understandably, caused a major uproar in the medical community. As many professionals noted when the bill was being discussed, while the QPA should bear some weight in the process of determining costs, it should not be given primary consideration as every medical procedure changes based on a variety of factors. For example, the provider offering the service, the market share of the provider/patient’s healthcare plan, the complexity of the patient case, and more can all affect costs — differences that are not adequately reflected in the QPA.

Using the QPA as a primary factor in determining costs, then, fails to take all of these factors into account, meaning that the amount billed would often be a poor indication of the cost of the actual services provided.

Furthermore, the specifics of the new IDR process made it inaccessible to some physicians. Recent rulings have caused the administrative (non-refundable) IDR fee to rise by 600%, which pushes the IDR process out of reach for many smaller physicians. This, in turn, benefits insurance companies.

After its passage, some even claimed that such emphasis on the QPA during the IDR was illegal as it went against the original spirit of the No Surprises Act. Consequently, several lawsuits were filed to stop the implementation of the Act until these issues could be resolved.

Now, we have good news. The judge in a case filed by Texas Medical Association has now ruled that this flawed section of the NSA — the section that demands arbitrators primarily consider the QPA above other factors — is, in fact, illegal. This means this section has been vacated, which is a ruling that will apply to the IDR process nationwide.

While this is a positive development, it is not a full resolution to the issue. In theory, this ruling should mean that arbiters will now consider all factors mentioned in the legislation rather than giving undue weight to the QPA. If implemented in this way, this will be hugely favorable for physicians.

Yet again, the actual implementation may be different. We anticipate that the new rule would indeed allow arbitrators to consider all allowable factors in determining billing. Unfortunately, this has not been wholly confirmed, as we’re still awaiting an official update Rule from the Departments. It is also possible that the Departments will appeal the judge’s ruling, which could result in further complications. For the time being, the Departments have put in place an indefinite hold on payment determinations for arbitrators.

As it currently stands, there is no timeline for when this new rule, or a potential appeal, will be filed. We will keep you updated as the situation changes.