A second interim final rule outlining the details of the No Surprises Act was released last week by the Department of Health and Human Services (HHS), the Department of Labor, and the Department of the Treasury (collectively, the Departments), along with the Office of Personnel Management (OPM).
“Requirements Related to Surprise Billing; Part II” lays out much-anticipated guidelines related to the Independent Dispute Resolution (IDR) process between payers and providers, as well as requirements for good faith estimates and a patient-provider dispute resolution for uninsured (or self-pay) individuals.
Since these latest regulations build on early rules published this summer, it’s important to understand those guidelines first.
The July 13, 2021 interim final rule, “Requirements Related to Surprise Billing; Part I,” was published with the intent to “restrict excessive out-of-pocket costs to consumers resulting from surprise billing and balance billing.” The following provisions included in that rule go into effect for health care providers and facilities, and providers of air ambulance services on January 1, 2022, and for plan, policy, or contract years starting on or after January 1, 2022, for group health plans, health insurance issuers, and Federal Employees Health Benefits (FEHB) program carriers:
- Bans balance billing for emergency services.
- Limits patient cost-sharing for emergency services and certain non-emergency services provided at an in-network facility to in-network rates.
- Requires providers and facilities to provide good faith estimates of expected charges for scheduled services and any items or services in conjunction with those services, including those provided by another provider or facility, along with the billing and diagnostic codes for the services both to uninsured patients and to the health plans of insured patients. In late summer, CMS announced that enforcement of this requirement for individuals enrolled in a health plan will be deferred “until rulemaking to fully implement this requirement to provide such a good faith estimate to an individual’s plan or coverage is adopted and applicable” (see Q5. under Good Faith Estimate in this FAQ document). Additional guidelines for good faith estimates for uninsured individuals or those not seeking to have a claim for the service submitted to the plan was included in the most recent rulemaking and is explained below.
- Prohibits OON charges for items or services provided by an OON provider at an in-network facility, unless certain notice and consent is given.
- Establishes a cost-sharing rate for emergency services and certain non-emergency services furnished by OON providers at certain in-network facilities based on a state All-Payer Model Agreement, specified state law, or, if neither of these apply, the qualifying payment amount (QPA). The QPA is generally the plan or issuer’s median contracted rate for the same or similar service in the specific geographic area.
- Allows the balance of the bill to be paid by the plan or issuer following patient cost sharing and any initial payment from the plan to be determined between the provider, facility, provider of air ambulance services, and the plan or issuer through an open negotiation period or the federal IDR process if the parties cannot agree on a payment amount. The IDR is laid out in more detail in the most recent interim final rule and explained below.
On September 10, 2021, the Departments and OPM released a notice of proposed rulemaking (NPRM) called “Reporting Requirements Regarding Air Ambulance Services, Agent and Broker Disclosure Requirements and HHS Enforcement,” to establish:
- New reporting requirements regarding air ambulance services;
- New disclosures and reporting requirements regarding agent and broker compensation;
- New procedures for enforcement of Public Health Service Act (PHS Act) provisions against providers, health care facilities, and providers of air ambulance services;
- New disclosure and reporting requirements applicable to issuers of individual health insurance coverage and short-term, limited-duration insurance regarding agent and broker compensation; and
- Revisions to existing PHS Act enforcement procedures for plans and issuers.
According to the Centers for Medicare and Medicaid Services (CMS), The “Requirements Related to Surprise Billing; Part II” rule builds on the July 1, 2021 rule and the September 10, 2021 NPRM to continue implementing the No Surprises Act.
Independent Dispute Resolution
The biggest news coming out of the Requirements Related to Surprise Billing; Part II Interim Final Rule are the guidelines for the Independent Dispute Resolution (IDR) process that OON providers, facilities, providers of air ambulance services, plans, and issuers in the group and individual markets may use to determine the OON rate for items or services prohibited under the “Requirements Related to Surprise Billing; Part I” rule. These guidelines establish the steps and timeline of the IDR process, the fees charged for using the process, and the information that may be used to determine the final payment amount of the claim. The rule also describes the independent dispute resolution entity certification process and the information independent dispute resolution entities must submit to be certified as federal independent dispute resolution entities.
Before initiating the IDR process, however, disputing parties must initiate a 30-day “open negotiation” period, starting on the day of initial payment or notice of denial, to attempt to determine a payment rate on their own. If no determination is reached, either party has four business days to initiate the IDR process.
Once initiated, the IDR process includes a series of rapid steps.
- Within three business days of the initiation of the IDR, the parties must jointly select a certified IDR entity to resolve the dispute. If the parties cannot jointly select a certified IRD entity or if the selected certified IRD entity has a conflict of interest, the Departments will select a certified independent dispute resolution entity within six business days of the initiation of the IDR.
- After a certified IDR entity is selected, the parties have 10 business days to submit their offers for payment along with supporting documentation.
- Within 30 business days of the certified IDR entity selection, the certified IDR entity must issue a binding determination selecting one of the parties’ offers as the OON payment amount.
- The applicable party then has 30 business days after the determination to submit payment.
- Both parties must pay an administrative fee ($50 each for 2022), and the non-prevailing party is responsible for the certified IDR entity fee for the use of this process. For 2022, the certified IDR entity fee must be in the range of $200-$500 or $268-$670 for batched determinations.
“The timelines of the [independent dispute resolution] process are very, very quick,” said Amanda Hayes-Kibreab, partner with law firm King & Spalding, in a Fierce Healthcare interview. “There is not going to be any time for dilly-dallying.
Batch claims may also be submitted through the IDR process. A batched claim would include multiple cases involving the same provider or facility (based on NPI and/or TIN), the same insurer, the same or similar items for treatment of the same or similar medical condition, and all within the same single 30-business-day period.
When making payment determinations, the interim final rule specifies that certified IDR entities should begin with the presumption that the QPA, defined as the plan or issuer’s median contracted rate for the same or similar service in the specific geographic area, is the appropriate OON amount and choose the offer closest to that amount.
Parties are allowed to submit additional information, which the certified IDR entity must consider as credible, but for the IDR entity to deviate from the offer closest to the QPA, any information submitted must clearly demonstrate that the value of the item or service is materially different from the QPA. Also, certified IDR entities are not permitted to use usual and customary charges, billed charge, and reimbursement rates paid by public payers (such as Medicare, Medicaid, CHIP, or TRICARE) in their determination.
Provider groups have cried foul over the payment determination guidelines, claiming that a presumption that the QPA is the appropriate rate is akin to setting a national payment rate.
“The interim final regulation issued late yesterday to implement the No Surprises Act ignores congressional intent and flies in the face of the Biden Administration’s stated concerns about consolidation in the healthcare marketplace. It disregards the insurance industry’s role in creating the problem of surprise billing at the expense of independent physician practices whose ability to negotiate provider network contracts continues to erode,” said AMA President Gerald A. Harmon, MD in a prepared statement.
Certified IDR Entities
The rule also prescribes the certification process for IDR entities on a rolling basis, and provides a process by which members of the public, including providers, facilities, providers of air ambulance services, and plans or issuers, can petition for the denial or revocation of certification of an IDR entity. The rule also requires certified IDR entities to issue monthly reports to inform quarterly public reports on payment determinations.
Entities that would like to be certified by January 1, 2022, should submit their application by November 1, 2021, at the federal portal.
Good Faith Estimates for the Uninsured
Beginning January 1, 2022, when an uninsured patient schedules a service, or upon request, providers and facilities are required to provide a good faith estimate, including expected charges for all services reasonably expected to be provided together, including items or services that may be provided by other providers and facilities.
From January 1, 2022, through December 31, 2022, HHS will exercise enforcement discretion in situations where a good faith estimate provided to an uninsured individual does not include expected charges from other providers and facilities that are involved, since it will “take time for providers and facilities to develop systems and processes for providing and receiving the required information from others.”
Patient-Provider Dispute Resolution for the Uninsured
Finally, in situations where an uninsured individual ends up being billed for an amount substantially higher than the good faith estimate, defined as at least $400 higher than estimated, the patient has 120 calendar days from the date the bill was received to initiate a patient-provider dispute resolution. A select dispute resolution (SDR) entity will then make a payment determination, and both parties will be charged a $25 administrative fee.
For more information about the No Surprises Act and the subsequent rulemaking, check out the following:
- CMS’s Requirements Related to Surprise Billing; Part I Interim Final Rule with Comment Period Fact Sheet
- CMS’s Air Ambulance Notice of Proposed Rulemaking – Fact Sheet
- CMS’s Requirements Related to Surprise Billing; Part II Interim Final Rule with Comment Period Fact Sheet
- Calendar Year 2022 Fee Guidance for the Federal Independent Resolution Process Under the No Surprises Act
- From the CIPROMS blog: Payers, Providers Seek Delay for No Surprises Act Implementation, HHS Offers Some Relief
- From the CIPROMS blog: Surprise Billing Interim Final Rule: What You Should Know
- From the CIPROMS blog: Planning Ahead for No Surprises Act Implementation
- From the CIPROMS blog: Unpacking the No Surprises Act
- From the AMA blog: Surprise billing regulation is a surprise gift to insurance industry
- Doctors slam surprise billing rule that details dispute resolution process by Shannon Muchmore for Healthcare Dive
- Biden admin releases surprise billing rule detailing arbitration process by Robert King for Fierce Healthcare
- Providers cry foul over new surprise billing rule’s arbitration process by Robert King for Fierce Healthcare
- CMS unveils another surprise-billing rule: 12 things to know by Alia Paavola for Becker’s Hospital CFO Report
- Banning Surprise Bills, Part 1: A New Rule On Independent Dispute Resolution by Katie Keith, Jack Hoadley, and Kevin Lucia for Health Affairs
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