After years of concern from policymakers and industry stakeholders about patients receiving surprise medical bills when they inadvertently use an out-of-network provider, a new federal law will go into effect January 1, 2022, that could largely eliminate these surprise bills. The first regulation implementing that protection, published in the Federal Register today, shows how complex and far-reaching the No Surprises Act truly is. Stakeholders need to work now to be ready for the January 1, 2022 compliance deadline.
Surprise medical bills generally occur when a commercially insured patient unintentionally receives out-of-network care from a provider that does not contract with the patient’s health plan and the provider balance bills the patient for fees the provider charges that exceed the amount the plan is willing to pay. This most commonly occurs when a patient seeks care in an emergency at a hospital that is out of network—or when the patient seeks care at an in-network facility but is treated by out-of-network ancillary providers, like an anesthesiologist or radiologist, whom the patient can’t choose. (The No Surprises Act also provides some protection against excessive bills for uninsured patients, and protects against surprise billing by air ambulances, but not conventional ambulances.)
While surprise billing has long been recognized as a significant gap in the U.S. health care system, a major stumbling block to a fix has been deciding how plans should reimburse providers if they haven’t negotiated a price in advance. The No Surprises Act says that if that determination is not made under applicable state law and providers and plans can’t agree on reimbursement, prices will be set through an independent dispute resolution (IDR) process. The details of the IDR process have been hotly contested and are likely to be the most consequential aspect of the No Surprises Act but are not addressed in the rules published today. They will be addressed in separate rules later this year.
Instead, today’s rules implement the No Surprises Act provisions that (1) prohibit group health plans, individual and group health insurance coverage, and federal employee health plans, as well as out-of-network health care providers, facilities and air ambulance services, from imposing balance billing, (2) determine how the Qualifying Payment Amount (QPA), which can be used to determine the patient cost-sharing and is a factor in the IDR process, will be calculated, (3) limit patient cost-sharing to the amount that would have applied if the provider was in-network, (4) require that notice be provided to patients regarding these protections, (5) establish a complaint process and (6) allow patients in limited circumstances to receive notice of and consent to allow providers to bill for amounts in excess of in-network charges.
The patient cost-sharing for these unexpected out-of-network services is calculated based on the amount determined under state law or a federally approved all-payer demonstration (if either applies) or the lesser of the provider’s billed charge or the health plan’s median contracted rate (referred to as a “qualifying payment amount”). However, the amount the plan pays to such a provider is separately determined by state law, a federally approved all-payer demonstration, or negotiation between the plan and the provider—and if that fails, the amount is set by the IDR process. Thus, the patient cost-sharing does not depend on the amount the plan ultimately pays the provider. The rule provides some explanation about how to determine whether state or federal law is used to resolve a surprise billing situation, but the interaction between state and federal law will likely remain one of the more complex areas of implementation.
The No Surprises Act permits patients to consent in advance to be billed full charges by a nonparticipating provider at a participating facility, but the rules say balance billing is always prohibited “in certain circumstances where surprise bills are likely to occur, such as for ancillary services provided by nonparticipating providers in connection with non-emergency care in a participating facility.”
The rule also unexpectedly addressed when health plans can deny coverage for non-emergency use of a hospital emergency department. The rule says that plans cannot rely solely on the patient’s diagnosis to determine whether the care was truly an emergency; the plan must evaluate whether the patient’s presenting symptoms would have led a reasonable layperson to conclude that the patient needed emergency medical treatment.
Post-stabilization services are also considered emergency services to which the rule’s protections apply, but the rule lays out conditions when a patient could be safely transported to an in-network facility for post-stabilization care and the patient can be given notice that they are no longer protected from surprise billing.
Stakeholders can submit public comments on these rules through September 7.
