Considerations for the Next Phase of the No Surprises Act Implementation

Footnotes for this article are available at the end of this page.

The No Surprises Act (“NSA”) went into effect on January 1, 2022. The NSA places numerous obligations on certain healthcare providers, facilities, and providers of air ambulance services to protect consumers against surprise medical billing at the federal level. Broadly, the NSA prohibits balance billing for out-of-network emergency services and other out-of-network care provided at in-network facilities unless specific consent is granted. The NSA further provides a new process for consumers obtaining a good faith estimate of their treatment costs from their providers. Most important for out-of-network providers is the new independent dispute resolution (“IDR”) process, which determines the payment amount for these out-of-network services as providers can no longer balance bill. The NSA sets forth specific time frames and procedures for challenging rates, as well as guidance to the IDR entities for the arbitration process. The Centers for Medicare and Medicaid Services (“CMS”) has continued to release guidance regarding the NSA related to the balance billing prohibition, good faith estimate requirement, and IDR.

IDR Legal Challenges and Delays

While many of the requirements of the NSA have been successfully implemented, the IDR process remains in flux. Specifically, it has been challenged through a series of lawsuits over the last year.1 These lawsuits have challenged the underlying data that the IDR entities can consider when determining the out-of-network payment amount.  In particular, these cases take issue with the rule’s requirement that IDR entities presume that the qualifying payment amount (“QPA”) — the insurer or plan’s median in-network rate — is the appropriate out-of-network payment amount unless a party submits credible information that clearly demonstrates that this amount is materially different from the appropriate out-of-network rate.

As a result of these challenges and the Texas Medical Center ruling2, on February 28, 2022, CMS and the Department of Labor withdrew guidance documents that refer to the invalidated portion of the rules. New guidance was issued in April for both the IDR entities and the disputing parties.3 HHS also delayed rolling out the IDR portal until April 15, 2022. IDR entities are now required to consider the QPA and the following additional factors:

  • The provider’s level of training, experience, quality, and outcomes measurements
  • The provider’s regional market share
  • The acuity of the individual who received the item or service, or the complexity of providing the service
  • The teaching status, case mix, and scope of services that the provider or facility offers
  • Demonstration of good faith efforts, or lack of efforts, from the provider and payer to enter into network agreements4

Understanding the New System

Now that the portal has been live for several months, there continues to be challenges for providers submitting claims as they work out the processes with payers and the IDR entities. There has been a substantial delay in the resolution of many claims due to a backlog following the delayed implementation of the IDR portal. While this timeframe will hopefully decrease as time progresses, providers should be aware at the outset that the process will likely take longer than allowed by regulations.

Incorporating All Relevant Information Into Dispute

While usual and customary charges, billed charges, and payment rates in federal healthcare programs are excluded from consideration and insurance companies are going to continue to favor the QPA, it is important that providers leverage the additional factors allowed in the new guidance in their IDR requests to establish fair benchmarks for their rates. The federal IDR process uses baseball style arbitration — which means that the IDR entity will select one offer. Providers should include detailed information on all of these factors to support their rates as the QPA could be substantially lower than what providers would like to establish as their reimbursement rates.

Batching Claims

As the independent dispute resolution entities begin receiving, reviewing, and making determinations on these claims, several other pieces of information are important to keep in mind, namely the batching requirements for submitting groups of claims.

Batching is allowed for claims submitted within a 30-day period that meet the following:

  • Services furnished by same provider or facility
  • Services provided to patients under the same plan
  • Services are for treatment of similar conditions
  • The secretary to specify criteria and may allow exceptions to the 30-day period5

Insurance companies and the IDR entities are eager to find reasons to throw out IDR requests due to alleged improper batching. It is important that providers review the requirements for batching and utilize consistent processes when submitting their claims.

Federal vs. State IDR

It is important for all hospital-based providers and facilities who are currently out of network or considering going out of network with one or more payers to familiarize themselves with the federal IDR process. While the federal IDR process will apply to some disputes in every state, it is also imperative that providers recognize that many states have their own process for resolving claims disputes.  These separate processes can create confusion as to which entity to submit the claims. CMS has published enforcement letters on its website that describe how the federal and state processes will work in conjunction for each state. See link here. Providers are expected to work this information out with the health plans, but this can create substantial delays in achieving resolution if claims get rejected.


Providers, specifically in hospital settings, are feeling increasing pressure to go in network to avoid payment delays and costs associated with the NSA IDR process. However, at this early stage, payers do not seem to share the urgency in resolving these network issues. Further, additional legal challenges to the NSA as well as the issuance of a final rule may still have a substantive impact on this process. As a result, it is imperative that providers pay close attention to the timing and other requirements of the NSA IDR process.  Especially in these early stages of the NSA, it is important for providers to create benchmark rates to ensure that they are paid fairly for the services rendered. For more information regarding the NSA IDR process or questions about arbitration assistance, representation, or associated contracting disputes, please contact Nicole Wemhoff.

[1] Texas Med. Ass’n v. U.S. Dep’t of Health & Human Services, No. 6:21-cv-425 (E.D. Tex. Feb. 23, 2022); American Medical Ass’n v. U.S. D.H.H.S., No. 1:21-cv-3231 (D. D.C., filed Dec. 9, 2021). To date, a total of eight lawsuits have been filed challenging parts of the IDR process.

[2] Texas Med. Ass’n v. U.S. Dep’t of Health & Human Services. On February 23, 2022, the district court held that this aspect of the rules (1) conflicts with the unambiguous terms of the NSA; and (2) was improperly promulgated without prior notice and an opportunity to comment. The district court vacated those aspects of the rules that required the IDR entities to select the offer closest to the QPA unless presented with credible information that clearly demonstrates the QPA is materially different from the appropriate rate.

[3] Federal Independent Dispute Resolution (IDR) Process Guidance for Certified IDR Entities, Cntrs for Medicare and Medicaid Services (April 12, 2022),

[4] Id. at 21.

[5] Id. at 16.