Last week, a number of developments arose stemming from the various lawsuits challenging the No Surprises Act. First, in response to the Eastern District of Texas’ order vacating the administrative fee guidance for the Independent Dispute Resolution (IDR) process, the Departments of Health and Human Services, the Treasury, and Labor (the Departments) released updated administrative fee FAQs reducing the administrative fee for disputes initiated on or after August 3, 2023, to $50 per party per dispute (IDR Process Administrative Fee FAQs). Additionally, the Departments obtained their first major victory in the collection of cases challenging the No Surprises Act. The summary judgment opinion out of the District of Columbia Federal District Court upheld regulations regarding the calculation of the qualifying payment amount (QPA) for air ambulance services.

IDR Administrative Fee

On August 3, 2023, the U.S. District Court for the Eastern District of Texas issued an opinion and order in Texas Medical Association v. United States Department of Health and Human Services vacating the administrative fee guidance that increased the IDR administrative fee from $50 per party per dispute to $350. The order also vacated regulatory text regarding the batching of claims for the IDR process. In response to this order, the Departments indefinitely suspended the IDR process, signaling an intent to release updated guidance to comply with the district court’s order. This opinion is covered in more detail in a previous issue of Health Headlines.

On August 11, 2023, the Departments issued updated IDR Process Administrative Fee FAQs returning the IDR administrative fee to $50 per party per dispute for disputes initiated on or after August 3, 2023. The IDR process remains suspended in the wake of the Texas Medical Association victory, so disputes may not yet be initiated under the updated fee schedule, but the IDR Process Administrative Fee FAQs signaled an intent to reopen the portal and notify interested parties “soon.”

Air Ambulance Opinion

On August 10, 2023, Judge Leon of the District of Columbia Federal District Court issued a memorandum opinion dismissing a challenge by the Association of Air Medical Services (AAMS) to the way in which the QPA is calculated for air ambulance services under Department regulations. AAMS challenged multiple aspects of the QPA calculation methodology applicable to air ambulance services. First, AAMS argued that the regulations used overly broad geographic regions that do not reflect actual market pricing. AAMS also challenged the Departments’ exclusion of single case agreements in the calculation of the QPA, arguing that these single case agreements make up the majority of “contracted rates.” AAMS also argued that hospital-based and independent air ambulance providers should not be considered as being in the “same or similar specialty,” but instead should have different QPAs calculated to reflect market dynamics.

Judge Leon rejected these arguments, holding the Departments’ determination of the QPA for air ambulance services was within their discretion granted by the No Surprises Act, and reflected the “very type of well reasoned analysis the APA requires.” Another suit challenging aspects of the QPA calculation for non-air ambulance services is pending in the Eastern District of Texas, and the Departments are expected to rely heavily on Judge Leon’s opinion for support.

The IDR Process Administrative Fee FAQs are available here. The District of Columbia Federal District Court’s opinion is available here.