On Dec. 27, 2020, the No Surprises Act (NSA) was signed into law as part of the Consolidated Appropriations Act of 2021. These provisions were intended to address unexpected gaps in insurance coverage that result in “surprise medical bills” when patients unknowingly obtain medical services from physicians and other providers outside their health insurance network.
Because the No Surprises Act, which takes effect on Jan. 1, 2022, imposes limits and confers some rights on physicians caring for patients in these situations, it is important for physicians to understand how the law will affect them.
Implementing certain provisions of the No Surprises Act
On July 1, 2021, the Departments of Health and Human Services (HHS), Department of Labor (DOL) and Department of Treasury (the Departments) and the Office of Personnel Management (OPM) issued an interim final rule (IFR) (PDF) implementing several provisions of the NSA, enacted as part of the Consolidated Appropriations Act, 2021 (CAA).
Given statutory timeframes required under the NSA and the pending implementation of most provisions by Jan. 1, 2022, the Departments made the decision to issue an IFR. As a result, the requirements outlined in the IFR are final and will become effective on Sept. 13, 2021. However, the Departments request comments on several aspects of the rule. The AMA will be responding by the Sept. 7, 2021, comment period deadline.
The IFR states that this is the first of several regulations that the Departments will be issuing to implement the NSA. Regulations on the Independent Dispute Resolution (IDR) process, price comparison tools and certain transparency requirements are expected later this year. Rules on other NSA provisions, including insurance card requirements, continuity of care, provider network directions and prohibition on gag clauses, may not be published until next year. (Guidance on using a good faith interpretation of the statute in the interim will be issued soon.)
In general, the IFR provides the following:
- In determining how the qualifying payment amount (QPA) is calculated, the IFR reduces the likelihood that plans will need to use data from outside, independent databases. This is done through broad definitions of “markets” and “geographic regions,” allowing reliance on small data sets, benchmarking for “new service codes,” etc.
- Reduces the role of bonuses, risk sharing, penalties and other incentive-based and retrospective payments or payment adjustments in the calculation of the QPA.
- Establishes a structure for the interaction of state and federal surprise billing requirements, where state law preempts federal law when either a set payment amount or dispute resolution process is in place for state-regulated plans and, when applicable, self-funded Employee Retirement Income Security Act (ERISA) plans that opt-in to the state law.
- Outlines a process by which a patient receives notice and potentially provides consent to receive out-of-network care and forgo the financial protections of the NSA.
- Establishes criteria for facilities and physicians/providers to provide required disclosure to patients about balance billing protections—both state and federal.
- Broadens complaint processes for patients, physicians and plans.
- Reaffirms several patient protections for emergency medical care, including the prudent layperson standard.
The AMA has several initial concerns about the way the QPA (median contracted rate) will be determined. Additionally, while the Departments attempt to consolidate and standardize some administrative requirements on physicians, in other areas the Departments expand requirements in ways that may not benefit patients but result in burdens on physicians. The AMA will provide detailed comments to the Departments upon a full analysis of the IFR.
Download the PDF for part one of the summaries on the IFR of the No Surprises Act.
Requirements related to surprise billing
The IFR issued by the HHS and the Departments on September 30, 2021, implements the following parts of the NSA:
- The open negotiations and independent dispute resolution (IDR) processes between providers (physicians, hospitals, etc.) and health plans.
- Section 110 of the NSA expanding the scope of the federal external review process to cover adverse benefit determinations under the NSA.
- The good faith estimate (GFE) requirements for uninsured patients and patients who are not planning to use their coverage (i.e., self-pay).
- The dispute resolution process for uninsured or self-pay patients when the GFE significantly exceeds the costs of care.
- By establishing the qualifying payment amount (QPA) as a presumptively reasonable out-of-network payment, the Departments are underscoring their objective to reduce the frequency with which the IDR is used and ultimately bringing down the in-network rates of facilities and facility-based providers.
- Although the QPA is meant to represent the median in-network rate, the method used to calculate it (as outlined in Part I IFR), will often result in much lower amounts. Together, the Part I and Part II IFRs will make it more difficult for physicians to receive fair payment for out-of-network services and to enter into meaningful contract negotiations with health plans which now have little incentive to offer fair contracted rates (especially since most insurance markets are highly concentrated).
- Improvements made in the IFR to the ability of physician groups to batch all claims during the 90-day “cooling off” period will create greater efficiencies for many physicians.
- While advancing greater price transparency, the provisions implementing the GFE requirements could place a significant burden on physician practices, especially those physicians who are responsible for collecting the estimates of other ancillary providers and as patients use the GFE to shop for services.
- The patient-provider dispute resolution process could result in some confusion for patients and providers, especially in situations where last minutes changes are made to ancillary providers and when unanticipated care is needed during a service or procedure.
- Expanding the scope of the external review process may provide greater clarity in the way in which denials are handled under the NSA and increase opportunities for patients to challenge adverse benefit determinations.
The first IFR implementing the NSA established the process for determining the cost-sharing responsibility of patients in a surprise billing situation by outlining a method to calculate the QPA. For the federal process, the QPA is meant to represent the median in-network rates for the same or similar services in that geographic area. However, the AMA remains very concerned that the method the Departments' direct plans to use to calculate the QPA will often result in rates well below the true median of in-network commercial rates.
In the most recent IFR, the Departments outline the processes for payers and health plans to settle disputes over out-of-network payments, beginning with an open negotiation period followed by the formal IDR process. However, before any dispute can begin, the IFR clarifies that an initial payment or notice of denial must be sent to the provider and any initial payment should be an amount that the plan or issuer reasonably intends to be payment in full based on the relevant facts and circumstances.
Additionally, the Departments are establishing a federal IDR portal to be used for IDR entity (IDRE) certification, the initiation of the IDR process, the selection of an IDRE by parties, the submission of supporting documentation to IDREs and the submission of IDRE reporting metrics.
Download the PDF for part two of the summaries on the IFR of the No Surprises Act.
Aug. 11: Comment letter (PDF) to CMS on implementation of the No Surprises Act, advanced explanation of benefits and good faith estimates.
- June 17: Letter from Congress (PDF) to HHS, DOL and Department of Treasury, urging to “reflect congressional intent in your rulemaking by ensuring a balanced process to settle payment disputes between health plans and providers,” in regard to the NSA.
- June 14: Comment letter (PDF) to CMS administrator on IDR process.
- May 21: Comment letter (PDF) to CMS acting administrator on QPA and related calculations in the NSA.