The No Surprises Act (NSA) became effective on January 1, 2022. It prohibits surprise billing in certain circumstances. Surprise billing occurs when a patient receives an unexpected bill, often for a large amount, from an out-of-network (OON) provider without having a prior opportunity to select the provider. The patient’s health plan typically does not cover the full amount of the OON charges and the provider “balance bills” the patient for the outstanding amount. The NSA targets common circumstances where surprise billing occurs, including charges for:
- Emergency services furnished by an OON provider or facility subject to the NSA, air ambulance services furnished by an OON provider of air ambulance services, or nonemergency services furnished by an OON provider at an in-network facility; and
- A covered participant, beneficiary, or enrollee who did not receive notice or did not provide adequate consent to waive the balance billing protections regarding such items and services, pursuant to regulations at 45 CFR 149.410(b) or 149.420(c)-(i), as applicable; and
- Items or services for which the OON rate is not determined by reference to an All-Payer Model Agreement under Section 1115A of the Social Security Act or a specified state law.
Under the NSA, the patient is effectively cut out of the billing dispute—the patient only pays the in-network cost-sharing amounts, and the plan must pay under either a state All-Payer Model Agreement or other specified state law.
If there is no such Model Agreement or state law, the plan must make an initial payment or deny the clean claim within 30 days. If either party is dissatisfied, it may notify the other party of its desire to negotiate, and if both parties are agreeable they may enter into a 30-day open negotiation period to determine an alternate payment amount.
The NSA is administered by the U.S. Departments of the Treasury, Labor, and Health and Human Services (Departments). The federal IDR process is administered through the federal IDR Portal https://www.nsa-idr.cms.gov. The federal IDR process is complicated and will be challenging for anyone to comply with, but it can be broken down into the following steps:
Step 1. The plan must send an initial payment or notice of denial of payment within 30 calendar days of receipt of a clean claim covered by the NSA.
Step 2. An open negotiation period must be initiated within 30 business days beginning on the day the OON provider receives either an initial payment or a notice of denial of payment. The open notice period begins on the day on which the open negotiation notice is first sent by a party. Care should be taken to ensure that the notice complies with specified requirements.
Step 3. The parties must exhaust the open negotiation period. Upon exhausting the open negotiation period, and if open negotiation is unsuccessful, either party may request resolution under the federal Independent Dispute Resolution (IDR) process whereby a certified independent dispute resolution entity will review the case and determine the final payment amount. The notice of IDR Initiation must be sent to the other party and to the Departments within 4 business days after the close of the open negotiation period. The notice must be submitted to the Departments through the Federal IDR portal at https://www.nsa-idr.cms.gov. The notice must contain specific information including the initiating party’s preferred certified IDR entity. The non-initiating party can accept the initiating party’s preferred certified IDR entity or object and propose another certified IDR entity.
Step 4. The non-initiating party has 3 business days to object (including conflict of interest concerns) and propose another certified IDR entity. If the non-initiating party fails to object, it will be deemed to have accepted the initiating party’s preferred certified IDR entity.
Step 5. Within 4 business days after the date of initiation of the federal IDR process, the initiating party must notify the Departments that the parties have agreed on a certified IDR entity, or that the Departments should randomly select a certified IDR entity. Within this period, the non-initiating party must notify the Departments if it contends the federal IDR process is not applicable. The Departments will supply this information to the selected certified IDR entity, who must determine whether the federal IDR process is applicable. The IDR timeframes will continue to apply while the applicability issue is under review. If the selected IDR entity cannot participate, the Departments will notify the parties, and they will have 3 business days to select another certified IDR entity, or, if the parties indicated that they cannot agree on a certified IDR entity, the Departments will randomly select another certified IDR entity. The NSA allows for multiple qualified claims to be considered as part of a single IDR determination (batching) when the claims involve the same provider(s), plans, items, and services, and were incurred in the same 30/90-day period.
Step 6. If necessary, the Departments will make a random selection of a certified IDR entity within 6 business days after IDR initiation. The certified IDR entity may invoice the parties for administrative fees at the time of selection. These fees are estimated by the Departments to be $400 on average, and within the range of $200 – $500, or $268 – $670 for batched claims.
Step 7. Within 3 business days of selection, the certified IDR entity must submit an attestation that it does not have a conflict of interest and a determination that the federal IDR process is applicable.
Step 8. Within 10 business days after selection of the certified IDR entity, each party must submit its offer (the amount it contends should be paid to satisfy the claim) and pay the certified IDR entity fee (which will be held in a trust or escrow account by the certified IDR entity), and the administrative fee, which is a separate paid to the Departments. An offer will not be considered received by the certified IDR entity until the certified IDR entity fee and the administrative fee have been paid. The offer must include both a dollar amount and a percentage of the QPA (which is the median of the contracted rates recognized by the plan for the same or similar item or service that is provided by a provider in the same or similar specialty and provided in the same geographic region). Different QPAs should be provided if applicable for batched claims. If a party fails to make a timely or complete offer the certified IDR entity will select the other party’s offer as the final payment amount.
Step 9. Within 30 business days after the date of its selection, the certified IDR entity must determine the payment amount. (The parties may continue to negotiate up to the time the certified IDR entity makes its determination, in which case the initiating party has 3 business days to notify the entity and the departments of the agreement). The certified IDR entity must select one of the offers submitted and notify the parties and the Departments of its decision. The certified IDR entity must consider “credible” information submitted by the parties which relate to the offers, and which are not prohibited (usual and customary rates, billed charges, and Medicare rates). Additional information (different for air ambulance and non-air ambulance items and services) may be considered such as training, experience, quality of outcomes, market share, acuity of the patient, teaching status, case mix, scope of services, and good faith effort by the provider to enter into network arrangements.
Step 10. Any amount due from one party to the other party must be paid within 30 calendar days after the determination by the certified IDR entity. The certified IDR entity must refund the prevailing party’s certified IDR entity fee paid within 30 business days after the determination. The certified IDR entity’s decision is binding upon the parties unless there is fraud or evidence of intentional misrepresentation of material facts to the certified IDR entity.
Cooling off period. The party that initiated the federal IDR process may not submit a subsequent notice of IDR initiation involving the same other party with respect to a claim for the same or similar item or service that was the subject of the initial notice of IDR initiation during the 90-calendar-day suspension period following the determination.
Extensions. May be made for good cause in extenuating circumstances (such as natural disasters). Payment periods cannot be extended.
Recordkeeping and reporting. Certified IDR entities must maintain records of all claims and notices associated with the federal IDR process with respect to any payment determination for 6 years. Certified IDR entities must report certain data within 30 business days of the close of each month through the federal IDR portal. The reporting must be done to maintain certification.
Confidentiality. Certified IDR entities must maintain confidentiality and security regarding individually identifiable health information (IIHI) and must report any breaches of confidentiality.
Revocation of certification. The Departments may revoke the certification of a certified IDR entity if the entity demonstrates incompetence or failure to comply with the federal IDR process.
Resources (including links to model notices and forms).
