No Surprises Act: Initial Federal Surprise Billing Rules Released

On July 1st, 2021, an interim final rule was released, implementing provisions from the No Surprises Act, including defining the scope of surprise billing prohibition, limitations on cost-sharing, out-of-network rate determination, and how patients can opt-out of certain protections.

The Department of Health and Human Services (HHS), Department of Labor and Treasury, and the Office of Personnel Management recently published an interim final rule (IFR), meant to implement the initial provisions of the highly anticipated No Surprises Act, set to go into effect for insurance plan years beginning on January 1st, 2022.

The IFR addresses certain aspects of the No Surprises Act but does not address reporting requirements, price transparency, or independent dispute processes. These provisions will be addressed in additional rules, to be released through the end of 2021.

The goal of the No Surprises Act is to alleviate financial strain on patients when they encounter a “surprise” medical bill. This “surprise” is often a result of receiving care from an out-of-network provider at an in-network facility. The No Surprises Act was passed by Congress on December 22, 2020, in response to a call for a federal solution to surprise billing.

Prohibition of Surprise Billing

Surprise billing will be prohibited under three specific circumstances, as designated by the IFR.

1.??????The IFR bans surprise billing for any emergency services provided by an out-of-network provider. All health insurance plans must consider emergency services as in-network, regardless of the provider or preauthorization status. The IFR also expands the standard definition of emergency services to include all post-stabilization services that are provided after emergency care.

2.??????Any non-emergency services provided by out-of-network providers at in-network facilities must be treated as in-network services. In addition to in-person treatments, this rule covers furnishing of equipment, telehealth services, imaging and lab services, and pre/post-operative care. This rule can be waived if the out-of-network provider gives notice and receives consent from the patient about their out-of-network status. Note: urgent care facilities are currently not subject to the IFR in terms of non-emergency services, but the Act does allow HHS to extend this requirement to cover all types of facilities in the future.

3.??????Surprise billing will be prohibited for the provision of air ambulance services (this does not apply to ground ambulance services).

Limitations on Cost-Sharing

Another provision outlined by the IFR includes limitations on patient cost-sharing amounts, including copays, coinsurance, or deductibles, when the services are received at an out-of-network emergency facility, or non-emergency services received at an in-network hospital by an out-of-network provider. In either of these cases, the patient cannot be forced to pay higher cost-sharing requirements than in the case that all of the services were provided by in-network providers. The IFR also requires that all cost-sharing and out-of-pocket expenses must apply to the out-of-pocket maximum, as well as the deductible.

The IFR has also provided guidelines for health plans to calculate a “recognized amount” for use in determining cost-sharing amounts. This amount should be set by:

·????????An All-Payer Model Agreement, if available.

·????????A state law, if available.

·????????The amount charged by the out-of-network provider or the Qualified Payment Amount, whichever is lesser.

Many states already have protections in place for patients, similar to those provided by the No Surprises Act, so the IFR requires these state laws to be upheld and used to determine out-of-network rates if they provide a method to do so and the method meets the requirements outlined in the IFR.

In areas where there is no system of all-payer payment reform and no applicable state laws, cost-sharing amounts should be determined using either the out-of-network billed amount or the Qualified Payment Amount, whichever is less. The Qualified Payment Amount is determined using the median of contracted rates recognized by the health plan for given items or services as of January 31st, 2019, that are for the same or similar item/service, were furnished by a provider in the same or similar specialty and took place in the same geographic region.

As a part of the IFR, the HHS has granted themselves the authority to audit health plans as they see fit to ensure they are following the method laid out above for calculating QPA.

Out-of-Network Rate Determination

Under the IFR, an out-of-network provider’s payment amount must be equal to:

·????????The amount determined by an All-Payer Model Agreement, if available

·????????The amount specified by state law (if no All-Payer Model Agreement)

·????????The amount mutually agreed upon by the health plan and the provider (if no state laws)

·????????The amount determined through an IDR process (if the parties cannot reach an agreement)

Additionally, health plans must disclose the following items to providers when sending them payment or denial of payment in order to help providers understand the QPA process and negotiate out-of-network rates appropriately.

·????????The Qualified Payment Amount for each item or service listed

·????????Certification that QPA was calculated accurately, as outlined by the IFR

·????????Notice of a 30-day negotiation period to determine the out-of-network rate

·????????Notice of the option to start the IDR process within four days of the end of the negotiation period

Option to Waive Protections

For cases where patients elect to receive care from an out-of-network provider, regardless of increased costs, the Act has established the option for patients to waive the protections provided to them around surprise billing and cost-sharing, under certain circumstances.

The process to waive these protections requires that the out-of-network provider fill out a notice and consent form provided by HHS (the form must be filled out exactly as provided, with no additional information or modifications, except to add identifying information on the provider or facility) which includes a good faith estimate of costs the patient may incur for items or services that may be provided. This form must be presented to the patient at least 72 hours before the scheduled appointment for the out-of-network services (or at least three hours before the appointment if it is happening the same day). The inability to complete this form or file it correctly makes any waiver of protections void.

Additional details laid out by the IFR around waiving protections include:

·????????Notice and consent forms may be provided to patients on behalf of an out-of-network provider by an in-network facility.

·????????Forms must be available in the fifteen most common languages in the region.

·????????Patients must receive a signed copy of the form and forms must be maintained for at least seven years.

Exceptions to the requirements above are listed below. Under no circumstances can a patient waive the protections around surprise billing and cost-sharing for the following services:

·????????Emergency services

·????????Air ambulance services

·????????Items and services provided by an out-of-network provider when no in-network provider is available at the in-network facility

·????????Items and services provided during unforeseen, urgent medical needs, including non-emergency and post-stabilization care

·????????Ancillary services not normally selected by the patients, such as diagnostic services, anesthesiology, pathology, and neonatology.

Disclosures & Complaints

An additional provision of the IFR requires providers to include the surprise billing protections provided by the No Surprises Act on their websites available to the public. The IFR outlines that the provider’s disclosure should include an explanation of the prohibitions of the Act, along with the requirements necessary to receive such protections. Providers are also required to include any relevant state laws as well as contact information for state and federal agencies where the public can submit complaints if they believe a provider has violated the Act. While providers are welcome to draft their own disclosure statements, HHS has provided a model disclosure notice for entities to use that meets all requirements of the IFR, available on their website.

When a complaint is filed, the applicable department (Departments of Health and Human Services, Labor and Treasury, or the Office of Personnel Management) will respond within sixty business days of when the complaint is received with information on the complainants’ rights, obligations, and next steps. The IFR has not determined a time limit on when complaints can be filed after an incident, and the departments are seeking feedback on a recommended time period.

Key Dates

·????????August 12th, 2021: comments on the model notice and disclosure forms are due.

·????????September 7th, 2021: comments on the IFR are due.

·????????Late 2021: additional regulations to be released on the No Surprises Act.

·????????January 1st, 2022: providers are required to have a disclosure on their website.