No Surprises Act One Month In

On January 1, 2022, key provisions of the No Surprises Act (NSA) went into effect. At its core, the No Surprises Act seeks to protect patients from surprise bills generated by out-of-network emergency or air ambulance service providers, or other out-of-network (OON) services provided at in-network facilities. The law was passed in December 2020 as part of a last-minute COVID-19 relief bill.

Balance Billing, Disclosures, and Good Faith Estimates

Throughout 2021, the departments of Health and Human Services (HHS), Labor, and Treasury published regulations to implement the NSA, including the following which are now in effect:

banning balance billing above the in-network cost-sharing rate by out-of-network emergency physicians and non-emergency out-of-network providers at in-network facilities,
requiring NSA surprise billing protections to be disclosed on a public website and sent to each patient affected, and
requiring all providers to send good faith estimates upon request for all charges related to a scheduled item or service (including the cost of items and services provided by other practitioners) for uninsured and self-pay patients.

The law does allow some out-of-network providers at in-network facilities to provide notice and obtain consent to charge patients amounts higher than the in-network cost-sharing rate. The consent option does not apply to out-of-network providers providing emergency services or “ancillary services,” (i.e. anesthesiologists or radiologists).

Also, the law will eventually require the same good faith estimates to be provided for insured patients, though that requirement has been delayed until more guidelines can be published later in 2022. As well, late last summer, CMS announced that from January 1, 2022, through December 31, 2022, they 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.”

Independent Dispute Resolution Process

Another more controversial provision of the No Surprises Act also went into effect beginning January 1, 2022: the establishment of an independent dispute resolution (IDR) process for payers and providers when an agreement cannot be reached on the payment rate in surprise billing scenarios.

Namely, the requirement for arbiters to use the median in-network rate for a service as the so-called Qualified Payment Amount (QPA) has angered providers. The rules instruct arbiters to “begin with the presumption that the [qualifying payment amount] is the appropriate [out-of-network] amount.” In order to receive a higher level of payment from an insurer, providers must prove the QPA was inappropriate based on the physician’s level of training, the patient’s acuity level, or other mitigating factors.

Legal Challenges to the IDR Process

The Texas Medical Association (TMA) was the first to bring a lawsuit against the Biden administration’s No Surprises Act regulations, “arguing that the interim final rule on surprise billing goes against the intent of Congress and will ultimately harm patients,” according to Fierce Healthcare. The TMA lawsuit, filed back in October 2021, has since been joined by three others.

On November 16, 2021, the Association of Air Medical Services (AAMS) filed a lawsuit in federal court challenging the arbitration process.

“The fair and transparent process that we all supported is not the process being implemented,” said Cameron Curtis, president and CEO of the AAMS, in a statement. “Instead, we are faced with a scenario in which a patient in an emergency is transported by a helicopter at the request of a trained first responder or qualified physician, and that patient’s insurer gets to unilaterally determine the amount they pay.”

Later, on December 9, 2021, The American Medical Association (AMA) and American Hospital Association (AHA) also filed suit against the Departments of Labor, Treasury, and Health and Human Services over the IDR process.

“The legal challenge became necessary because the federal regulators’ interpretation upends the careful compromise Congress deliberately chose for resolving billing disputes,” the AHA contends. “According to the lawsuit, the new rule places a heavy thumb on the scale of an independent dispute resolution process, unfairly benefiting commercial health insurance companies. The skewed process will ultimately reduce access to care by discouraging meaningful contracting negotiations, reducing provider networks, and encouraging unsustainable compensation for teaching hospitals, physician practices, and other providers that significantly benefit patients and communities.”

Later on December 22, 2021, the American College of Emergency Physicians (ACEP), the American College of Radiology (ACR), and the American Society of Anesthesiologists (ASA) also filed a lawsuit against the federal government charging that “the interim final rule on surprise medical billing goes against the language of the No Surprises Act and will ultimately harm patients and access to care.”

“We strongly support the patient protections in this law,” said ASA President Randall M. Clark, M.D., FASA. “However, instead of expanding in-network access for patients, what this rule does is exactly what we explained to Congress and the rule-making agencies would happen: insurance companies will use their overwhelming market power and these flawed rules to push more physicians out of network and fatten their bottom line.”

ACEP echoed those concerns: “IFR requires arbiters to prioritize an artificially low Qualified Payment Amount (QPA) set by insurance companies, rather than giving equal weight to a mix of other factors. This step undermines the entire process and could encourage insurance companies to narrow their networks even further, which would make it harder for patients to get emergency care.”

Oral arguments in the TMA lawsuit will begin Friday, Feb. 4.

Initiating the IDR Process

To initiate the independent dispute resolution process, parties will use a new federal IDR portal which is slated to open in early 2022, after the first 30-day open negotiation periods between providers, facilities and health plans have concluded. 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.