Unpacking the No Surprises Act

After years of negotiation and proposed legislation, a last-minute COVID-19 relief bill passed on December 22, 2020, also included a ban on surprise billing under the No Surprises Act, which means patients will be held harmless for any bills for out-of-network emergency or air ambulance services and many out-of-network (OON) services provided at in-network facilities.

In essence, patients will be responsible for the equivalent of in-network cost sharing in instances of surprise OON situations. Amounts above that will be worked out between payers and providers, with disputes going to third-party arbitration, an option physician groups lobbied for. The bill also prohibits arbiters from considering Medicare and Medicaid rates or providers’ billed charges when deliberating OON bills. However, arbiters will be instructed to take into account the median in-network rate for the service.

In some non-emergency situations, OON providers and facilities will be able to bill patients for OON services beyond the in-network rate if specified notice and consent requirements are met. Here’s how it will work.

Disputed Charges

Beginning with plan years beginning January 1, 2022, for patients covered by group health plans, including self-insured plans, along with health insurance issuers of group and individual plans, nonparticipating providers at a participating facility or at a nonparticipating emergency facility will submit a claim for services to the out-of-network plan. The OON plan must make an initial payment or send a notice of denial within 30 days. If the provider is not satisfied with the adjudication, they can enter a 30-day open negotiation period with the plan. If a satisfactory resolution cannot be reached, the plan or provider has four days to notify the other party and the Secretary of HHS that they would like to enter the Independent Dispute Resolution (IDR) process.

The IDR process begins with the parties jointly selecting a certified IDR entity. Within 10 days of the selection, both parties must submit final offers, information requested by the IDR, and information each party wants to have considered. The IDR entity can also consider the “qualifying payment amount” (for the same service in the same geographic region), however, it cannot consider usual and customary rates, billed charges, or payment rates by public payors, including Medicare, Medicaid, CHIP, and Tricare. Within 30 days, the IDR will select one of the offers–they are not allowed to split the difference–and the party whose offer was not chosen will pay the costs of the IDR process. If the two parties reach a mutual agreement after the IDR entity is chosen but before it makes a final selection, the IDR process ends, and the two parties split any IDR costs.

All parties that use the IDR process will be required to pay an administrative fee to the Secretary each year. The amount of that fee has not yet been determined.

Batched Claims

Plans or providers may also batch claims for the IDR process in the following circumstances:

Services furnished by the same provider or facility.
Services provided to patients under the same plan.
Services for treatment of similar conditions.

The party that initiated the IDR process for batched claims cannot initiate it again with the same party and for the same services for 90 days after the resolution.

Balance Billing Exceptions

In some select circumstances, non-participating providers at participating facilities will be allowed to bill a patient for more than the cost-sharing requirements if the patient knowingly and voluntarily agrees to use an OON provider. In those cases, providers must provide the patient with written notice of their out-of-network status, along with a good faith estimate of the cost of planned services and a list of in-network providers at the facility, and receive the patient’s consent at least 72 hours in advance of the appointment.

The notice and consent exception does not apply, however, to OON providers of radiology, pathology, emergency, anesthesiology, diagnostic and neonatal services; assistant surgeons, hospitalists, and intensivists, or to providers offering services when no other in-network provider is available. In these circumstances, OON providers at in-network facilities cannot balance bill patients even if notice and consent guidelines are met.

Providers may be fined civil monetary penalties of up to $10,000 for violating the surprise billing regulations, but HHS may provide a hardship exemption or waive the penalties if the provider did not knowingly violate the law and refunds the patient with interest.

In-Network Provider Directories

The legislation also attempts to shore up in-network provider directories, requiring plans to verify and update their directories at least every 90 days, update provider information within two business days of receiving it, and respond to requests regarding the network status of a provider within one business day. Providers also are required to provide and maintain accurate information to plans.

To incentivize both parties to keep provider directories accurate, if a patient relies on erroneous directory information to retain medical services, the plan cannot impose a cost sharing amount greater than in-network rates and it must count toward the patient’s in-network out-of-pocket-maximum and in-network deductible. As well, the provider will be paid the previously contracted rate, and if the provider balance bills the patient in excess of in-network cost sharing, and the enrollee pays, the provider must refund the patient with interest.

Continuation of Care

Finally, the legislation also attempts to provide continuity of care for patients whose providers may no longer be in-network. If a provider contract is terminated, a “continuing patient” can continue for up to 90 days with the provider under the same terms and conditions as if they were in-network, except in the instance of for-cause terminations.