Don’t Be Surprised By No Surprises Act

• November 11, 2021
• Jennifer Boese

We’ve written about “surprise bills” in a previous CLA blog as well as a CLA article, which outlined the No Surprises Act requirements. Since then, multiple regulations have been released to implement the law, which goes into effect January 1, 2022.

The law also includes a broad requirement for “good faith estimates.” Many health care providers or facilities who may not be covered under the surprise billing prohibitions may not recognize that the good faith estimates are applicable to them. Therefore, it’s time to review some key requirements to make sure you’re not surprised come January.

A Ban on Balance Billing

The overarching point to remember is that the No Surprises Act was enacted to shield the patient from out-of-network costs/bills they didn’t expect (and shouldn’t reasonably expect) in emergency and certain non-emergency situations.

In emergency situations, the patient is treated as if in-network regardless of whether the facility or providers are in-network. This applies to hospital emergency rooms, independent freestanding emergency departments and urgent care when state licensure laws permit for emergency services. Emergency services, other care provided in conjunction with those, and possibly post-stabilization are covered unless a series of qualifications are met, including notice and consent.

For non-emergency situations, patients treated at in-network facilities but treated by out-of-network providers may not be balanced billing for those out-of-network costs unless notice and consent are given. Health care facilities include hospitals/CAHs, hospital outpatient departments and ambulatory surgical centers.

One big caveat in both emergency and non-emergency situations is that notice and consent to be balanced billed are not always an option. The following are excluded from the notice/consent procedures in emergency and/or non-emergency situations:

• Items/services related to emergency medicine, anesthesiology, pathology, radiology, neonatology (by physician or non-physician practitioner)
• Items and services provided by assistant surgeons, hospitalists, and intensivists (and specialists as determined by regulation)
• Diagnostic services (including radiology, laboratory services)
• Items and services provided by a nonparticipating provider if there is no participating provider who can furnish such item or service at such facility,
• Unforeseen medical needs arising at the time of the service

In other words, in the above situations, a patient may not be asked about balance billing nor consent to it. Period.

Out-Of-Network Patient Cost-Sharing, Provider Payments

The out-of-network rate (now a quasi in-network rate) that a patient is responsible for is termed the “recognized amount.” It is determined under one of three scenarios:

1. An amount determined by an applicable All-Payer Model Agreement
2. If there is no applicable All Payer Model Agreement, an amount determined by specified state law;
3. If no state law, then a Qualifying Payment Amount (QPA) which is the median in-network rate for like services in that geography

Determining the out-of-network rate (now a quasi in-network) paid by insurers to providers is determined under one of four scenarios:

1. An amount determined by an applicable All-Payer Model Agreement (Maryland)
2. If there is no applicable All-Payer Model Agreement, then an amount determined by a specified state law;
3. If 1,2 are not applicable, then an amount agreed to by plan/issuer and provider/facility
4. If none of the above apply, then the parties may enter Independent Dispute Resolution (IDR) process and amount paid will be determined by the IDR entity

Open Negotiations, Independent Dispute Resolution

A provider and payer have 30 days of “open negotiations” if there is disagreement on the reimbursement amount. After the 30 days, either party may initiate the IDR process within 4 days. There are various timing requirements throughout the process (see graphic).

Both parties must then submit their best and final offer to the IDR entity. IDR entities may not alter the offers submitted by providers/payers, but may consider items like level of training, experience, quality and outcomes, market share held in that geographic region, patient acuity, complexity of services, teaching status, case mix, and scope of services. The IDR entity may not consider usual and customary charges or rates from government programs, such as Medicare or Medicaid. The IDR entity must consider the QPA.

The latter requirement has become a sticking point with health care providers because the regulations create a presumption that the QPA is the appropriate rate unless credible information clearly shows that the rate is materially different than an appropriate out-of-network rate.

 “The Departments are of the view that the best interpretation … [of the law] is that when selecting an offer, a certified IDR entity must look first to the QPA, as it represents a reasonable market-based payment for relevant items and services, and then to other considerations. This presumption that the QPA is the appropriate out-of-network rate can be rebutted by presentation of credible information about additional circumstances that clearly demonstrate that the QPA is materially different from the appropriate out-of-network rate.”  [Bold added; See 2021-21441.pdf (govinfo.gov)]

This presumption has already led to one lawsuit being filed by the Texas Medical Association, stating the presumption is not consistent with the statutory text.

The IDR entity must make its decision within 30 days and payment must then be made within 30 days.

Good Faith Estimate: Applies Broadly

There is a provision in the statute and accompanying regulations that is not getting as much attention as the surprise billing prohibition, yet has a much broader application. This is the good faith estimate. It is required when health care services are scheduled and/or patient requests an estimate.

The good faith estimate must be provided to insured, uninsured and self-pay (whether insured or not) patients and is required of:

• Health care facilities, as defined as an institution (such as a hospital or hospital outpatient department, critical access hospital, ambulatory surgical center, rural health center, federally qualified health center, laboratory, or imaging center) in any State in which State or applicable local law provides for the licensing of such an institution
• Health care providers, as defined as a physician or other health care provider who is acting within the scope of practice of that provider’s license or certification under applicable State law, including an air ambulance provider

When seeking care, providers and facilities are to ask patients if they have insurance and then do the following:

• If commercially/privately insured, the provider or facility is to notify the insurer of the expected charges which the plan then uses to prepare an Advanced Explanation of Benefits and sends to patient. This aspect is DELAYED until data standards are developed for this transfer of information.
• If uninsured or will self-pay (even if they have insurance), a single, good faith estimate with all associated costs must be provided to the patient within required time frames along with multiple other requirements. This aspect is NOT DELAYED and will take effect January 1, 2022. However, HHS will exercise enforcement discretion throughout 2022 for situations where the estimate provided does not include the expected charges from the other providers or facilities involved in the individual’s care.

There are other requirements and complexities to the good faith estimate, including required timelines, notices and coordination/compiling all costs from providers and facilities into one document. It will be important for all health care providers to review these requirements.

Next Steps and How CLA Can Help

There is a lot to unpack in the No Surprises Act and implementation regulations. There are still many unanswered questions along with topics and details not covered in this blog. It’s important to not delay your preparations.

Here are a few steps you can take now.

1. Assemble a cross-functional team to oversee all aspects
2. Understand the law and accompanying regulations
3. Consider, create and post any required notices
4. Review all the required timelines (for notice, consent, IDR process, good faith estimates etc)
5. Determine your potential exposure for the law to apply (assess your contracts, credentialed physicians/employed and related considerations)
6. Update your revenue cycle process and workflows
7. Consider whether your state has state-level surprise billing laws. If so, how or will that law supersede the federal law
8. Work with your legal counsel, risk management and compliance staff

Reach out and consult with your CLA advisor for assistance as you move through these new requirements. We are here to know you and help you.

 

 

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