No Surprises Act
On Dec. 27, 2020, Congress passed, and President Trump signed, the No Surprises Act as part of the Appropriations bill. The No Surprises Act, which is a law not guidance, goes into effect for plan or policy years beginning on or after Jan. 1, 2022.
The surprise billing legislation establishes federal standards to protect patients from balance billing for defined items and services provided by specified doctors, hospitals and air ambulance carriers on an out-of-network basis. The federal law applies to individual, small group, and large group fully insured markets and self-insured group plans including grandfathered plans. The legislation caps patient cost-sharing for out-of-network items and services at in-network levels and requires providers to work with insurers and health plans to negotiate remaining bills. If the insurer/health plan and the provider are unable to reach agreement, an Independent Dispute Resolution (IDR) process, sometimes called arbitration, was established to determine the reimbursement amount.
There are federal rules and processes yet to be developed, and questions about scope and applicability as it relates to state laws still to be answered. We will continue to update our customers as more is known.
WHAT PROVIDERS AND FACILITIES DOES THE NO SURPRISES ACT APPLY TO?
No Surprises Act applies to three types of health care providers and facilities:
OON emergency covered items and services.
Covered medical items and services performed by an OON provider at an INN facility.
OON air ambulance items and services.
WHAT DO PAYERS HAVE TO DO WEHN THEY RECEIVE A BILL FOR OUT OF NETWORK SERVICES COVERED BY THE THE NO SURPRISES ACT?
Insurers/health plans have 30 days after they receive a bill to either pay the “out-of-network rate” directly to the provider or deny the claim. The out-of-network rate is the difference between the member’s cost-sharing amount and the following:
If the insurer/health plan and OON item or service is covered by a state law that establishes the reimbursement rate, that rate will apply.
If the state does not have an applicable law, either the amount agreed to by the insurers/health plan and provider or the amount set by the IDR process.
If the state has an All-Payer Model Agreement, the reimbursement is set by that agreement.
WHO CAN REQUEST AN INDEPENDENT DISPUTE RESOLUTION (IDR)?
Either an insurer/health plan or a provider may request independent dispute resolution. There is a 30-day negotiation period to resolve disputes over reimbursement for OON covered items and services. The negotiation period starts after the provider receives payment or a claim denial as discussed above. Four days after the end of the 30-day negotiation period, either the insurer/health plan or the provider can request an IDR.
DOES THE NO SURPRISES ACT PROHIBIT BALANCE BILLING?
Yes, in certain cases it may. OON providers are prohibited from balance billing members for emergency services. OON providers at INN facilities are prohibited from balance billing members with certain exceptions.
OON providers of ancillary services at an INN facility are prohibited from balance billing members. Ancillary services are defined by the No Surprises Act as those related to emergency medicine, anesthesiology, pathology, radiology, neonatology, and laboratory and in situations where an INN provider is not available at the INN facility to provide the services.
An OON provider at an INN facility may balance bill members if they are not providing ancillary services and if they give advance notice to the member that the covered item or service is OON and the estimated cost. The member must acknowledge that they received the notice.
WILL THE LAW APPLY IF A MEMBER CHOOSES TO USE AN OUT OF NETWORK PROVIDER?
No. The No Surprises Act does not impact claims related to members who choose to use OON providers. Balance billing may continue with those claims.
What is a Surprise bill?
Surprise medical bills occur when patients are treated by out-of-network (OON) providers under circumstances where they are unable to plan for or avoid the OON service (e.g., emergency care). Surprise bills can also occur when a patient is unknowingly treated by an out-of-network provider at an in-network facility such as a hospital. Usually, the out-of-network provider sends a bill to the patient’s insurance company, which pays a certain amount for the services. The remainder, or balance, of the bill is then sent to the patient.
What sort of healthcare claims are affected by the NSA?
The NSA covers claims related to emergency services from the point of a patient’s evaluation and treatment until they were stabilized and can consent to being transferred to an in-network facility. It covers air ambulances but not ground ambulances.
The NSA also covers claims related to non-emergency services when they are provided at an in-network facility by an out-of-network provider.
When do the NO Surprises Act Rules go into effect?
The new law takes effect for health plan years beginning on or after January 1, 2022.
What is a QPA *Qualified Payment Amount)?
QPA is a term introduced by the No Surprises Act (NSA). It is the plan’s median contracted rate for a specific service in the same geographic region within the same insurance market — the middle amount in an ascending or descending list of contracted rates, adjusted for market consumer price index in urban areas (CPIU). It’s important because it will be a key factor during the arbitration process if a provider does not agree with the payor’s initial payment, negotiations are unsuccessful and the Independent Dispute Resolution process is invoked. In most cases, the member cost share is based on QPA rather than the allowed amount, How can Healthcare payors avoid arbitration under the NSA?
How can healthcare providers avoid arbitration under the NSA?
Payors and providers go to arbitration under the NSA when they cannot agree on the amount of a payment for the providers’ services. Before bringing a case to arbitration, the parties must try to negotiate a settlement on their own. Either party has up to 30 days after the payor makes an initial payment to begin the negotiation process, and the negotiation must be open for at least 30 days. If the two sides can’t negotiate a settlement, either party can initiate the independent dispute resolution (IDR) process, also known as arbitration.