The No Surprises Act, passed as part of the Consolidated Appropriations Act, 2021 (CAA), includes prohibitions on certain “surprise” balance bills for:

1. Out-of-network emergency care in a hospital or free-standing emergency room (No Surprises Act section 102),
2. Most out-of-network services provided at in-network facilities (also under No Surprises Act section 102, with some minor exceptions for non-routine services that the out-of-network provider lists out and has the patient agree to well in advance so they understand all their options…but this exception process is not available for expected routine services such as labs, radiology, anesthesia, and other vital elements of a hospital or ambulatory surgical center visit), and
3. Out-of-network air ambulance services (No Surprises Act section 105).

The Act gives health care providers and health plans instructions on how to protect patients from these surprise balance bills, including:

• Directions on how the plan should determine an in-network rate to base the patient’s cost sharing on (this is called a qualifying payment amount, or QPA),
• Instructions to count the care toward in-network cost sharing requirements, such as deductibles and out-of-pocket maximums,
• Thirty-day turnaround on processing a clean claim and sending what the plan considers to be payment in full with an explanation to the provider,
• Thirty-day open negotiation period between the provider and the plan to resolve any differences between what the plan paid as “in full” and what the provider still feels they’re owed (since they cannot balance bill the patient more than the adjudicated in-network cost-sharing amounts), and
• An independent dispute resolution (IDR) process to follow should the 30-day negotiation period result in an impasse between the provider and the plan.

In July 2021 regulators published an interim final rule seeking public comment, which we reviewed here.  This provided vital details on which specific services/providers/facilities are covered, how to determine QPAs, and sample notices.  However, that guidance had stipulated it was only Part I among several, and that details on the federal IDR process, patient protections through transparency and the patient-provider dispute resolution process, price comparison tools, and air ambulance reporting would be forthcoming this year, while other details might wait until much later (such as ID cards, provider directories, etc.).

In August 2021, regulators delayed certain CAA transparency effective dates, which we reviewed here.  Numerous provisions were not delayed, however, so plans and providers are expected to comply in good faith with those, even if further guidance comes after this year or doesn’t come at all.

On Friday, September 10, 2021, regulators announced a notice of proposed rulemaking (NPRM) seeking public comment on the new air ambulance reporting required under section 106 of the No Surprises Act.  “The NPRM proposes that plans, issuers, and providers of air ambulance services submit data for each air ambulance claim and transport for the two years covered by the reporting requirements in the No Surprises Act.”  They also addressed enforcement mechanisms, including the ability to impose penalties of up to $10,000 per violation when air ambulance service providers fail to comply with the rules/prohibitions of the No Surprises Act or when providers or plans fail to provide reporting required under the Act.  A couple weeks later on September 28, FAIR Health released a report of private and Medicare air ambulance claims, revealing that utilization is up, average charges increased well over 20% in the last four years, and other helpful statistics.

On Thursday, September 30, 2021, regulators announced Part II guidance on the No Surprises Act, also in the form of an interim final rule seeking public comment due to the constrained time to get rules implemented for January 1, 2022.  They also announced the creation of a new “website focused primarily on providing general information about No Surprises Act provisions” which will include a federal portal for providers and plans to participate in the federal IDR process.  Below is a summary of the Part II provisions we believe employers are likely to find most relevant.

• Federal IDR Process
  • Only available for claims subject to the No Surprises Act (i.e., the 3 special types of claims listed above in our intro)
    • Even in states which have enacted laws to address balance billing or implement an All-Payer Model Agreement, those are limited to where such protections “generally determines an individual’s cost-sharing amount and the OON payment rate” but does not go far enough to provide the federal protections, particularly with respect to self-funded plans, out-of-state providers, and air ambulance providers, so the federal IDR process will largely apply to supplement such state law protections in the three types of claims covered by the No Surprises Act
  • The non-network provider and the plan must engage in the 30-day open negotiation process first before invoking the IDR process
  • If the open negotiations fail to resolve a billing discrepancy, the two parties may choose a certified IDR entity with which neither has a conflict of interest (if they cannot agree on one, the federal government will find one for them)
  • Each party will then submit a final offer for payment with supporting documentation along with a $50 admin fee for 2022 (see fee schedule here)
  • This is baseball style arbitration, so the federal IDR entity will choose one of the two options as binding upon all parties, and the losing party must pay all remaining IDR entity fees
    • Interestingly, it appears the process will have an element of at least attempting to stay close to in-network median rates
    • “When making a payment determination, certified [IDR] entities must begin with the presumption that the QPA is the appropriate OON amount.  If a party submits additional information that is allowed under the statute, then the certified [IDR] entity must consider this information if it is credible. For the [IDR] entity to deviate from the offer closest to the QPA, any information submitted must clearly demonstrate that the value of the item or service is materially different from the QPA.”
• External Review
  • Adverse benefit determinations (ABDs) will also include surprise billing and cost sharing protections under the No Surprises Act starting in 2022.
  • Even grandfathered plans that are not otherwise subject to external review requirements will be subject to having these ABDs eligible for external review, since the No Surprises Act does apply to grandfathered plans.
• There were also provisions governing good faith estimates and a patient-provider dispute resolution process for uninsured or self-pay patients and their providers, so we are not reviewing those here.

The Part II guidance also provides a helpful table of IDR deadlines as follows.

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.

This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.