The federal No Surprises Act (NSA), which became effective January 1, 2022, represents a massive change to health care patient financial practices. The core of the NSA is a prohibition on out-of-network providers charging commercially insured patients more than their in-network cost-sharing in three surprise medical billing situations: emergency services at a hospital emergency department (ED) or independent freestanding ED; certain out-of-network nonemergency services in an in-network hospital or ambulatory surgery center (ASC); and air ambulances.
When the NSA is triggered, the patient is charged the in-network cost-sharing and, if the out-of-network provider is unhappy with the plan’s payment amount, the provider can arbitrate the payment amount in a new independent dispute resolution (IDR) process, if state law does not set an out-of-network reimbursement methodology. Following are three major areas that providers and facilities need to know.1
1. Good Faith Estimates for Uninsured and Self-Pay Patients
Under the NSA, providers’ responsibilities for a good-faith estimate (GFE) for uninsured and self-pay patients differ depending on whether they serve as a “convening” provider or a “co-health care provider.” A convening health care provider (or facility) is one that receives an initial request for a GFE or that is responsible for scheduling the primary service. A co-health care provider (or facility) is one, other than the convening provider or facility, that furnishes items or services in conjunction with the primary service.2
Within one business day of a service being scheduled or a GFE requested, the convening provider or facility is required to request estimates from each co-provider or co-facility expected to provide services in connection with the convening provider’s or facility’s services. An uninsured or self-pay patient may dispute any bill that exceeds by more than $400 the amount listed for the provider or facility in the GFE.3 Once the arbitrator notifies the provider of the dispute resolution process, the provider or facility has ten business days to provide a copy of the disputed GFE and bill and any documentation that the difference was based on a medically necessary item or service that could not have been reasonably anticipated when the GFE was provided.
2. Patient Consent for Out-of-Network Billing
Sometimes an out-of-network bill isn’t a surprise. The NSA recognizes that and establishes rules that allow out-of-network providers to obtain the patient’s consent to waive the NSA protections.
The NSA prohibition on balance billing applies only for services rendered in a hospital, freestanding independent ED or ASC. The NSA provides no protection against balance billing for services in other settings or for nonemergency services in out-of-network facilities.
In situations when a patient has a real choice of using a network provider or an out-of-network provider in an in-network hospital or ASC, an out-of-network provider is allowed to obtain the patient’s consent to waive the NSA protections and accept the full billed charges. This also arises for post-stabilization services following emergency services.
The Department of Health and Human Services (HHS) has developed a standard notice and consent form that nonparticipating providers must use to obtain consent to balance bill, unless a state has developed its own form that satisfies the federal requirements.4
3. IDR of Health Plan Out-of-Network Reimbursement
Providers that are subject to the NSA’s prohibition on balance billing (and do not obtain the patient’s consent to waive the NSA protections) have the opportunity to arbitrate the health plan’s out-of-network reimbursement in the new IDR process. The federal IDR process applies only when state law does not set the out-of-network reimbursement rate and the payer and provider have not agreed on a rate.
The NSA requires “baseball style” arbitration: The IDR entity must select one of the offers submitted by the health plan or the provider; it cannot split the difference and make up its own payment rate. The IDR entity must consider the qualifying payment amount (QPA) and credible information submitted regarding the provider’s level of training, experience, quality and outcome measures, market share of a party, patient acuity or complexity of care, teaching status, case mix, scope of services of the nonparticipating facility, and the history of contracting between plan and provider.
The interim final rule establishing the IDR process differed from this standard because it specified that the “IDR entity must begin with the presumption that the QPA is the appropriate out-of-network rate” and “must select the offer closest to the QPA unless the certified IDR entity determines that credible information submitted by either party clearly demonstrates the QPA is materially different from the appropriate out-of-network rate.”5 The Texas Medical Association and several other provider organizations filed litigation challenging this aspect of the interim final rules. On February 23, 2022, the first judge to rule on these cases held that this aspect of the rules (1) conflicts with the terms of the NSA and (2) was improperly promulgated under the Administrative Procedure Act. The district court vacated the provisions that required the IDR entities to select the offer closest to the QPA unless presented with credible information that clearly demonstrates the QPA is materially different from the appropriate rate.6 On February 28, HHS and the Department of Labor said they would withdraw guidance documents that are based on, or refer to, the invalidated portions of the rules, repost the guidance documents, and provide training to IDR entities on the revised guidance.7 Nonetheless, the government has appealed the district court’s decision to the U.S. Court of Appeals, Fifth Circuit, and has also said it intends to issue a final rule on the IDR process shortly.
So, for all the diligence required to comply with these rules, they may be about to change again.
1 Among other client engagements on the NSA, I have authored physician guides to the NSA for the American Medical Association, which, in part, address similar topics as this article: American Medical Association Toolkit for Physicians: Preparing for Implementation of the No Surprises Act (2022) and American Medical Association Toolkit for Physicians: Disputing Out-of-Network Payments Using the No Surprises Act Independent Dispute Resolution Process (2022).
2 45 C.F.R. § 149.610(a)(2)(ii), (iii).
3 45 C.F.R. § 149.620.
4 45 C.F.R. § 149.420(c), (d), (e). The standard form is available here: https://www.cms.gov/files/document/standard-notice-consent-forms-nonparticipating-providers-emergency-facilities-regarding-consumer.pdf.
5 Requirements Related to Surprise Billing; Part II, 86 Fed. Reg. 55980, 55984 (Oct. 7, 2021).
6 Texas Med. Ass’n v. U.S. Dep’t of Health & Human Servs., No. 6:21-cv-425 (E.D. Tex. Feb. 23, 2022).
7 Centers for Medicare & Medicaid Services, Memorandum Regarding Continuing Surprise Billing Protections for Consumers (2022).