New FAQs Address No Surprises Act Requirements

 

On August 19, 2022, the DOL, HHS and IRS (the departments) released 23 FAQs that address various aspects of the surprise billing requirements under the No Surprises Act (NSA), which was part of the Consolidated Appropriations Act, 2021. The NSA provisions apply to health insurers and group health plans effective for plan years beginning on or after January 1, 2022.

The NSA provides patient protections against surprise medical bills for out-of-network (OON) emergency services, air ambulance services and certain OON nonemergency services provided at in-network (INN) facilities. The departments issued interim final rules in July 2021 to implement the NSA. Under the NSA and its implementing provisions, balance billing for covered items and services is generally prohibited and patient cost-sharing is limited. In the absence of an applicable All-Payer Model Agreement or state surprise billing law (which generally apply only to insured plans), patient cost-sharing is based on the lesser of the OON billed charge or the qualifying payment amount (QPA), which is the median contracted rate for the item or service in the geographic region.

The remainder of the OON bill must be resolved between the plan or insurer and healthcare provider or facility; the NSA establishes a new system for this purpose. Under this system, if the OON provider disagrees with the plan or insurer’s initial payment amount, the parties can engage in a 30-day open negotiation period. If the negotiations fail, either party can pursue the federal independent dispute resolution (IDR) process, in which the arbitrator selects either the amount proposed by the provider or the plan/insurer as the final OON payment amount. The departments issued interim final rules on the federal IDR process in October 2021. As modified by final rules issued on August 19, 2022, the IDR entity must consider the QPA and additional information submitted by the parties when making the final payment determination. Specific disclosure requirements are imposed upon plans, insurers and providers regarding the patient protections and payment dispute process.

Accordingly, the FAQs supplement the guidance under the prior interim final rules as modified by the recent final rules. Generally, the FAQs reinforce the other guidance and clarify the application in certain situations. Specifically, the FAQs address the NSA’s application to no-network plans, air ambulance services and behavioral health facilities. The FAQs also cover NSA disclosures, the methodology for calculating QPAs and the federal IDR process. The final few questions explain requirements under the Transparency in Coverage (TiC) final rule.

Applicability to No-Network and Closed Network Plans
The first five FAQs discuss the NSA provisions with respect to no-network plans, such as a plan that applies referenced-based pricing and pays a set amount for a covered item or service. FAQs 1 and 2 explain that the NSA would apply if the plan covered emergency services and air ambulance services because the protections are not limited to receipt of these services from in-network (INN) providers and facilities. However, the provisions that prohibit balance billing for nonemergency services received at INN facilities would never be triggered if a plan did not have a network of participating facilities. FAQ 3 notes that a no-network plan may need to use an eligible database to determine the QPA for NSA-covered items and services if there is insufficient information to calculate a median contracted rate due to the lack of participating providers. FAQ 4 explains that if a provider and no-network plan enter the federal IDR process to resolve a payment dispute for NSA-covered items and services, the final payment amount could vary from the referenced-based price. FAQ 5 describes how maximum out-of-pocket requirements apply to items and services subject to the NSA for a no-network plan.

FAQ 6 confirms that even if a plan generally does not provide OON coverage, the NSA protections for emergency services, air ambulance services and nonemergency services by OON providers at INN facilities would still apply if these services were otherwise covered under the plan.

Applicability to Air Ambulance Services
FAQs 7 – 9 address the applicability of the NSA provisions to air ambulance services. FAQ 7 clarifies that a plan is not required to cover nonemergency air ambulance services if such services are not otherwise covered under the plan terms. FAQ 8 confirms that the NSA protections apply to air ambulance services from an OON provider when the pickup point is outside of US jurisdiction. FAQ 9 acknowledges that, for purposes of calculating the QPA, the existing guidance does not provide for geographic regions outside of the US, although the departments intend to address this issue in future rulemaking. In the interim, plans are expected to use a reasonable method to determine the QPA, such as one based on the geographic region of the border point of US entry following patient pickup.

Applicability to Emergency Services Furnished in a Behavioral Health Crisis Facility
FAQ 10 clarifies that mental health conditions and substance use disorders that meet the NSA definition of an “emergency medical condition” are subject to the NSA protections. Accordingly, emergency services provided in response to a behavioral health crisis at a hospital emergency department or freestanding emergency facility are protected, regardless of whether the license issued to the facility uses the term “emergency services.”

General Disclosure for Protections Against Balance Billing
FAQs 11 and 12 address disclosure requirements regarding NSA protections. Generally, plans and insurers must make publicly available, post on a public website of the plan or insurer, and include on each explanation of benefits for a covered item or service, information regarding the NSA requirements and prohibitions, applicable state laws regarding surprise billing and the appropriate state and federal authorities for reporting potential NSA protections. The departments issued a model disclosure notice that may be used to satisfy these disclosure requirements, please see Appendix III to the FAQs and the information in the next section, “Standard Notice and Consent Form and Model Disclosure Notice Regarding Patient Protections Against Balance Billing”.

If a group health plan does not have a website, FAQ 11 explains that the plan may satisfy the public website posting requirements by entering into a written agreement under which a plan’s insurer or third-party administrator (TPA), as applicable, posts the information on its public website where information is normally made available to participants, beneficiaries and enrollees, on the plan’s behalf. The departments note this guidance applies in instances in which the plan sponsor may maintain a public website, but the group health plan sponsored by the employer does not. However, if the insurer or TPA fails to post the required information, the plan violates the disclosure requirements. Related FAQ 12 verifies that plans and insurers are only required to provide information on state surprise billing laws applicable to enrollees in the coverage.

Standard Notice and Consent Form and Model Disclosure Notice Regarding Patient Protections Against Balance Billing
FAQ 13 pertains to the standard notice and consent form that a healthcare provider must use when providing notice and seeking consent from individuals to waive the NSA protections, which is only permitted in certain limited situations. The FAQ also addresses the model notice plans can use to disclose patient protections against surprise billing. The departments revised the initial versions of the standard form and model notice provided for these disclosure purposes. The FAQ clarifies that providers may use either the initial or revised version of the standard notice and consent form for items and services furnished during calendar year 2022. However, providers may use only the revised version for items and services furnished on or after January 1, 2023. Similarly, plans and insurers may use either model notice for plan years beginning on or after January 1, 2022, and before January 1, 2023. For plan years beginning on or after January 1, 2023, only the revised model notice may be used. The various versions of the notices are accessible from the appendices to the FAQs. The revised version of the “Model Disclosure Notice Regarding Patient Protections Against Surprise Billing” applicable to group health plans is accessible from Appendix III at:
Model Disclosure Notice Regarding Patient Protections Against Surprise Billing (cms.gov)

Methodology for Calculating QPAs
FAQs 14 and 15 involve the methodology for calculating the QPA. FAQ 14 explains that if a plan or insurer has contracted rates that vary based on provider specialty for a service code, the median contracted rate (and consequently the QPA) must be calculated separately for each provider specialty, as applicable. This guidance recognizes that providers may only negotiate the rates in a fee schedule for services that they bill. For example, an anesthesiologist’s contract may include rates for anesthesia services that are a result of negotiations with the plan or insurer and that are materially different from the contracted rates the plan or insurer has for the same anesthesia services with other providers in specialties that do not bill for those services. FAQ 15 confirms that if a self-insured group health plan offers multiple benefit package options administered by different TPAs, the plan may allow each TPA to calculate a QPA separately for those benefit package options administered by the TPA.

Requirements for Initial Payments, Notices of Payment Denials, Related Disclosures and Initiation of the Open Negotiation Period and Federal IDR Process
FAQs 16 – 21 address the federal IDR process. FAQ 16 reinforces that plan and insurers must send an initial payment or notice of payment denial within 30 calendar days of the plan’s receipt of an OON provider’s “clean claim” for NSA-covered services, meaning a claim with the necessary information to make a payment determination. FAQ 17 confirms that providers have 30 business days from the day they receive an initial payment or a notice of payment denial to initiate open negotiations with the plan or insurer regarding the billed item or service. This timeframe to initiate open negotiations applies regardless of whether the plan or insurer timely sends the initial payment or notice of payment denial. For this purpose, FAQ 18 explains that the initial payment should be an amount that the plan or insurer reasonably intends to be payment in full based on the relevant facts and circumstances and as required under the terms of the plan or coverage. A notice of payment denial means a written notice from the plan or insurer that states that payment for the item or service will not be made by the plan or coverage and explains the reason for denial (e.g., subject to a deductible not yet satisfied). This notice is distinct from an adverse benefit determination, which is subject to the plan’s claims and appeals process.

FAQ 19 reviews the information plans, and insurers must provide with an initial payment or notice of payment denial when the QPA is used for participant cost-sharing purposes. This information must include the QPA for each item or service, an explanation of any provider billed service codes that were downcoded (i.e., replaced with codes deemed more appropriate but with lower reimbursement rates) and the applicable QPA(s) absent the downcoding, and the contact information, including a telephone and email address, if the provider wishes to initiate a 30-business-day open negotiation period to determine the total payment amount. Question 20 confirms that a provider can still open the negotiation period within 30 business days after receiving the initial payment or notice of payment denial, regardless of whether the plan has satisfied the applicable disclosure requirements. FAQ 21 reinforces that plans and insurers cannot require an OON provider to submit claims through an online portal to initiate the open negotiation process, but instead must accept the standard open negotiation form for this purpose.

Transparency in Coverage Requirements
Finally, FAQs 22 and 23 cover requirements under the TiC final rule. FAQ 22 addresses the requirement that plans publicly post machine readable files reflecting the plans INN rates and historical allowed amounts for covered items and services. The FAQ explains that if a group health plan does not have its own public website, the plan is not required to create one for this purpose but may satisfy the requirements by entering into a written agreement under which a service provider (such as a TPA) posts the machine-readable files on its public website on behalf of the plan. However, the plan must post a link to the historical allowed amount file hosted by the service provider on the plan’s own website, if the plan maintains a public website. If the TPA fails to post the files in accordance with the written agreement, the plan violates the disclosure requirements. FAQ 23 focuses on the TiC participant self-service tool requirement, which is effective for 500 items and services for plan years beginning on or after January 1, 2023. The FAQ provides the website for accessing the initial list of items and services, which will be updated quarterly.

Employers that sponsor group health plans may find the new FAQs helpful in understanding and satisfying the NSA and TiC requirements.

FAQs »