The Centers for Medicare and Medicaid Services (CMS) announced on Friday it will reduce the administrative fee that providers and insurers are required to pay when initiating a reimbursement dispute under the No Surprises Act.
The announcement follows a week after the Texas Medical Association’s successful court challenge against the Department of Health and Human Services (HHS). This third legal victory disputed the 600% price increase that HHS imposed on the fee for starting the independent dispute resolution (IDR) process.
Signed into law in December 2020, the No Surprises Act was designed to protect Americans from unexpected medical bills. The legislation mandates that patients cannot be billed out-of-network rates for emergency care. Instead, they are only required to pay their in-network cost-sharing. The Act also established an IDR process for cases where providers and payers cannot agree on a reimbursement rate, delegating review and fair payment determination to an independent mediator.
In October, CMS announced the IDR process’s administrative fee would remain at $50 in 2023. However, in December, the fee was increased to $350, effective January 2023. CMS justified the hike by citing supplemental data analysis and increased expenses in executing the federal IDR process.
In response, the Texas Medical Association filed a lawsuit against HHS in January over the fee hike. The abrupt increase made the IDR process significantly more expensive and potentially cost-prohibitive for many.
On August 3, a Texas federal judge nullified the $350 fee. U.S. District Judge Jeremy Kernolde stated in his ruling that HHS did not adhere to the notice and comment prerequisites needed for raising administrative fees for providers and payers. The federal IDR process was temporarily suspended as a result, including the ability for providers and payers to initiate new disputes.
In an FAQ document released on Friday, CMS announced that the fee for disputes initiated on or after August 3 would revert back to $50. The $50 fee would also apply to all unpaid disputes initiated before August 3. However, parties that paid the $350 fee for a dispute initiated between January 1 and August 2 are not required to have it refunded by CMS following Judge Kernolde’s ruling.
The federal IDR portal, where providers and payers can start new disputes, remains closed. CMS has stated that it plans to reopen the submission portal for new disputes soon and will notify interested parties at that time.