April 5, 2023

The Honorable Joseph Biden
The President of the United States
The White House
Washington, D.C. 20500

The Honorable Kamala Harris
The Vice President of the United States
Eisenhower Executive Office Building
Washington, D.C. 20501

The Honorable Xavier Becerra
Secretary
U.S. Department of Health and Human Services
200 Independence Avenue SW
Washington, D.C. 20201

The Honorable Chiquita Brooks-LaSure
Administrator
U.S. Centers for Medicare & Medicaid Services
200 Independence Avenue S.W.
Washington, D.C. 20201

Re: Implementation of P.L. 116-260, 134 Stat. 1182, Division BB, § 109

Dear President Biden, Vice President Harris, Secretary Becerra, and Administrator Brooks-LaSure,

On behalf of millions of taxpayers and consumers across the United States, the Coalition Against Rate-Setting (CARS) and other organizations urge you to follow the plain language of the No Surprises Act and implement a balanced, market-based system for resolving disputes over surprise medical bills without harmful price controls. 

The No Surprises Act (NSA) went into effect on January 1, 2022. The law provides a nationwide framework for resolving out-of-network billing disputes between providers and insurers while holding patients harmless for out-of-pocket costs beyond their in-network responsibility. With the passage of the NSA, patients are no longer subject to surprise medical bills.

Unfortunately, your administration has mismanaged the implementation of the NSA, threatening to destabilize our healthcare system. Specifically, the independent dispute resolution (IDR) process established under the NSA has been undermined by reckless rulemaking that has undermined the impartiality of the system in favor of insurers through backdoor federal ratesetting. We urge your administration to reverse course and develop fair and balanced regulations consistent with the clear congressional intent of the NSA. Ultimately, reimbursement for healthcare services should be market-based, which will allow physicians to best care for their patients in a cost-effective and streamlined manner.

When the NSA was signed into law, health care providers believed that the surprise medical billing crisis was behind them. They believed that your administration would implement the law’s IDR process in a way that would bring all parties together to facilitate fair reimbursement while securing long-term, equitable in-network contracts. The effect has been the opposite. Insurers have terminated contracts of providers across the country, believing that they can pay less than a market rate for services. Your administration’s NSA regulations have allowed payers to manipulate their median contract rate (Qualifying Payment Amount, or “QPA”), among other tactics. One study shows that payors reduced the amount of payments for out-of-network care provided by emergency medicine groups in 2022 by $1 billion (or 32 percent) under the NSA.

Insurers refuse to participate meaningfully in the open negotiations process which forces providers to engage in expensive and time-consuming IDR to seek fair payment. This has overwhelmed the IDR system as disputed claims filed into the IDR system have far exceeded the amounts forecasted by your own administration.

Further, regulatory directives given to the arbitrators have proven disastrous, resulting in litigation and two rulings against the government, vacating critical sections of both the NSA’s Interim Final Rule and Final Rule. Specifically, the Texas Eastern District Court reasoned that the administration’s draft regulations gave far too much weight to the QPA. Two more cases are pending seeking to correct your administration’s flawed rulemaking.

Without the District Court’s rulings in these lawsuits, the process set up by the Centers for Medicare & Medicaid Services (CMS) clearly attempt to make the QPA a de facto price control in arbitration decisions. As the Court ruled in Texas Medical Association v. U.S. Department of Health and Human Services et. al. (TMA II), “the Final Rule...continues to place a thumb on the scale for the... [median in-network rate]...by requiring arbitrators to begin with the QPA and then imposing restrictions on the non-QPA factors that appear nowhere in the statute.”2 This regulatory structure flagrantly undermined the congressional of the intent of NSA, wherein Congress clearly intended for the QPA to be one of many factors considered by arbitrators, also including patient acuity, provider training and experience, market share and prior contracts between the parties in the preceding four years.

Wherever tried, this type of rate-setting has failed doctors and their patients. Ever since California enacted rate-setting in 2017, doctor’s offices and clinics have been consolidating at an alarming rate, with patients being left in the lurch. Doctors surveyed in a 2019 American Journal of Managed Care study report having decreased leverage against big insurance companies and are even contemplating leaving the Golden State. Data from the California state government shows that access to care complaints in the state shot up nearly 50 percent since the enactment of rate-setting there. CMS has a chance to avoid this failed status-quo by redesigning the national arbitration system more fairly.

It is critical that CMS craft new rules, which establish an impartial, market-based IDR process to determine reimbursement rates for providers. Rulemaking agencies must follow the letter of the law as it pertains to the NSA. For example, the statute states that payments to provers who prevail in the IDR process must be authorized within 30 days, but regulators have neglected to enforce this provision. We also ask that the administration encourage payers to meaningfully engage in open negotiations and to have minimum network adequacy standards. These reforms will allow for a market-based structure consistent with the intent of the No Surprises Act. Additionally, these changes will eliminate incentives for narrow insurance network and reduce the number of claims filed in the IDR system.

We thank you for your time and attention to this pressing matter.

Sincerely,

David Williams 
President, Taxpayers Protection Alliance 

Matthew Kandrach 
President, Consumer Action for a Strong Economy 

Christopher G. Sheeron 
President, Action for Health 

Cesar Yabarra 
Executive Director, FreedomWorks 

Jackson Reese 
Vice President, California Policy Center 

Robert Fellner 
Vice President, Nevada Policy Research Institute 

Ryan Ellis 
President, Center for a Free Economy 

Mike Stenhouse 
Founder & CEO, Rhose Island Center for Freedom and Prosperity 

Jeffrey Mazzella 
President, Center for Individual Freedom 

Paul Gessing 
President, Rio Grande Foundation 

Tom Schatz 
President, Citizens Against Government Waste 

James L. Martin 
Founder/Chairman, 60 Plus Association 

Saulius "Saul" Anuzis 
President, 60 Plus Association 

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