The law unsurprisingly took effect in January, but its implementation continues on multiple fronts, including the Biden administration crafting federal regulations, court proceedings challenging some of those regulations, and in state legislatures where lawmakers are considering revising existing laws or creating new ones that align more closely with federal law.
The law aims to protect patients against unexpected medical expenses when they receive emergency care at facilities outside their insurance network or from out-of-network physicians or other non-physician clinicians at a hospital in the network, an outpatient surgery center or an independent emergency service.
The AMA, American Hospital Association (AHA), and Texas Medical Association (TMA) filed lawsuits when the administration issued rules governing the law’s Independent Dispute Resolution (IDR) process that did not inconsistent with law passed by Congress and biased in favor of insurance companies.
“The AMA strongly supports protecting patients from unexpected medical bills that can significantly increase out-of-pocket expenses and threaten access to quality care,” said Bobby Mukkamala, MD, Chairman of the Board of the AMA. AMA, during an AMA Advocacy Insights webinar on the statutory out-of-network payment process.
Dr. Mukkamala, an otolaryngologist in Flint, Michigan, described how the AMA advocated for a balanced process to fairly determine physician payment for out-of-network care.
But “regulations implementing the IDR process have placed a thumb on the scale in favor of insurers by requiring the arbitrator to consider the median rate in the health plan network, or QPA – the qualified payment amount – as the appropriate off-grid rate in most situations, essentially predetermining the outcome of the process,” Dr. Mukkamala said during the webinar, a follow-up to a January session on law implementation.
Doctors, hospitals go to court
Legal action soon followed. The TMA filed a lawsuit in the U.S. District Court for the Eastern District of Texas, which was followed by another filed jointly by the AMA and AHA in the U.S. District Court in Washington, DC.
The lawsuits “argue that the administration exceeded its statutory authority in carrying out this IDR process,” Dr. Mukkamala said. A Texas federal judge agreed with the doctors and struck down the disputed QPA regulations, ruling they were inconsistent with the law. Find out about the dispute.
The administration continued with its implementation and released a memorandum saying the struck down portions of the rule would not be enforced, said Michael Kolber, partner at Manatt Health and one of the webinar presenters.
The AMA has created a toolkit to help physicians navigate the Independent Dispute Resolution process (PDF). It will be updated with Centers for Medicare & Medicaid Services (CMS) guidelines released after the court’s decision regarding Disputing Parties (PDF) and Certified IDR Entities (PDF) and information on opening a federally operated online portal to manage the IDR Process.
“In general, federal law provides a baseline, and state law may continue to apply as long as it is stricter and provides better patient protection than that which applies to federal law” , said Kolber.
State plans do not cover employer-sponsored health plans, although some states may create a mechanism for such plans to opt into the state system, he added. The complexity grows as state officials determine where their laws overlap with federal law and which elements take precedence.
Key questions to understand this include whether the specified state law:
- Covers the particular plan involved in a dispute.
- Applies to the establishment where the services were performed.
- Applies to service.
Some states may only apply to emergency services, Kolber added. CMS issued and posted guidance letters to each state. States are taking a myriad of approaches, with Texas and Pennsylvania taking positions at opposite ends of the spectrum.
Texas has its own comprehensive law which includes a voluntary, non-binding mediation process. Pennsylvania does not have its own law, but will coordinate activity with CMS under a collaborative enforcement agreement, said Joel Ario, chief executive of Manatt Health.
Ario also cited the example of Washington, where Governor Jay Inslee signed into law a bill officially “harmonizing” his law with federal law and adding a provision covering behavioral health emergencies treated outside of a hospital.
“It’s starting a trend,” Ario said.