Addressing Air Ambulance Services, Court Again Vacates Portions of No Surprises Act’s IDR Regulations

LifeNet, Inc. v. HHS, 2022 WL 2959715 (E.D. Tex. 2022)

A federal trial court has again vacated key portions of the interim final regulations implementing the independent dispute resolution (IDR) provisions of the No Surprises Act—this time relating to air ambulance services. As background, the No Surprises Act, enacted as part of the Consolidated Appropriations Act, 2021 (CAA), expanded patient protections to shield individuals from surprise bills for certain out-of-network emergency and non-emergency services, including certain air ambulance services. The agencies jointly issued two sets of interim final regulations addressing, among other things, participant cost-sharing for services subject to the CAA, in most situations using the qualifying payment amount (QPA), which is based on the plan’s median in-network rate (see our Checkpoint article). The regulations also address procedural aspects of plan payments of the out-of-network rate to nonparticipating providers and explain the role of certified IDR entities, the parties’ submission of proposed payment amounts, and factors certified IDR entities may consider in selecting a party’s payment amount (see our Checkpoint article). The same federal trial court previously invalidated a portion of the regulations that prioritized the QPA over other factors in determining the payment amount for out-of-network emergency and non-emergency services (see our Checkpoint article). As a result, the agencies revised the IDR process guides with respect to those services but not air ambulance services, which were not addressed in that ruling (see our Checkpoint article).

In the current lawsuit, brought by an air ambulance company, the court considered portions of the interim final regulations specifying that, in determining the out-of-network rate for air ambulance services during IDR, additional information considered must “clearly demonstrate” that the QPA is “materially different” from the appropriate out-of-network rate. Characterizing the relevant provisions as “nearly identical” to those at issue in the earlier decision, the court concluded that they similarly must be vacated, explaining that nothing in the statute compels IDR entities to weigh any factor or circumstance more heavily than the others. And the court again held that the agencies’ failure to adopt the regulations through notice-and-comment rulemaking (rather than as an interim final rule) provided a separate and independent basis for vacating the relevant provisions.

EBIA Comment: Presumably, the agencies will again revise the IDR process guides to reflect this decision. Plans and insurers should watch for additional guidance. For more information, see EBIA’s Health Care Reform manual at Sections XII.B.3 (“Surprise Medical Billing: Emergency and Non-Emergency Services”) and XII.B.4 (“Surprise Air Ambulance Billing”). See also EBIA’s Group Health Plan Mandates manual at Section XIII.B (“Patient Protections”) and EBIA’s Self-Insured Health Plans manual at Section XIII.C (“Federally Mandated Benefits”).

Contributing Editors: EBIA Staff.

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