CMS Reduces No Surprises Act Fee After Court Vacates Price Hike

CMS has reinstated the $50 fee for initiating a payment dispute under the No Surprises Act following a court ruling striking down a price hike earlier this year.

The non-refundable administrative fee for a payment dispute under the law’s independent dispute resolution (IDR) process increased from $50 to $350 at the start of 2023. CMS announced the 600 percent price hike in a December 2022 memo. The agency said it increased 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 (TMA) challenged the new fee, which both parties involved in a dispute must pay. The US District Court for the Eastern District of Texas ruled in favor of TMA, vacating the federal fee increase nationwide in an August 3rd ruling.

“TMA believes this unfair steep jump in fees has dramatically curtailed many physicians’ ability to seek arbitration when a health plan offers insufficient payment for out-of-network care,” Rick W. Snyder II, MD, president of TMA, said in a statement on the court ruling.

The court also vacated the batching rule under the No Surprises Act because CMS failed to follow notice-and-comment requirements.

CMS announced in an FAQ document on Friday that it is going back to the old fee after the court ruling for disputes initiated on or after August 3rd. The lower fee will also apply to unpaid disputes before August 3rd until the Departments of Health and Human Services, Labor, and the Treasury set a new fee amount.

Additionally, CMS said the court ruling does not require the federal government to refund parties for administrative fees paid before August 3rd.

The FAQ document, however, does not reopen the IDR process for new payment disputes. CMS clarified in the document that the Departments “intend to reopen the portal to permit the submission of new disputes soon and will notify interested parties at that time.”

The Departments closed the IDR process in light of the court vacating the batching rule, which allowed parties to group multiple qualifying IDR items or services to be considered for payment jointly. For example, the items or services might all relate to the treatment of a similar condition, so out-of-network providers could initiate a payment dispute for payment for all the services provided to the patient during an encounter.

The Departments had said in a previous final rule that items or services are considered to be the same or similar items or services if each is billed under the same Current Procedure Terminology (CPT) code (including any applicable modifier), Healthcare Common Procedure Coding System (HCPCS) code with modifier, or Diagnosis-Related Group (DRG) codes with applicable modifiers.

TMA and other healthcare providers also challenged the batching rule in court. The court concluded policies requiring the same CPT, HCPCS, or DRG code limits the types of claims parties can batch, leading to separate IDR submissions.

The Departments are working on guidance after the court vacated the batching rule. They plan to reopen the IDR process when they can provide additional instructions.