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Last Updated: Oct 12, 2021

250x250 Surprise BillingUnderstanding the No Surprises Act: Federal Legislation Passed Aimed at Curbing Surprise Billing and Interim Final Rules Issued

The omnibus federal government spending and pandemic aid bill passed by the United States Congress and subsequently signed into law in December 2020 included significant provisions aimed at protecting patients against surprise medical-bills and determining out-of-network provider payments.

The portions of the legislation regarding surprise billing are referred to as the No Surprises Act (Act). Most provisions of the Act take effect with the plan year for 2022. The Act required the promulgation of federal regulations to implement certain provisions.

Surprise Billing Interim Final Rule Contains Patient Protections

Over the past few months, the U.S. Department of Health and Human Services (HHS) in conjunction with several other federal agencies have issued a series of interim final rules implementing many of the Act’s provisions.

The most recent interim final rule was published in the Oct. 7, 2021 edition of the Federal Register and details the dispute resolution process. This rule can be accessed here.

A fact sheet on this latest rule was published by the Centers for Medicare and Medicaid Services (CMS).

The rule requires providers/facilities to provide good faith estimates to uninsured or self-pay patients starting Jan 1, 2022. The good faith estimate will include expected charges for the primary item or service the patient is receiving, as well as for any other items or services that would reasonably be expected to be provided as part of the same scheduled or requested items/services.

To make this good faith estimate as useful for uninsured (or self-pay) individuals as possible, providers must:

  • Provide a good faith estimate to an uninsured (or self-pay) individual:
    • Within 1 business day after scheduling (this timeline applies when your primary item or service is scheduled at least 3 business days before the day you would receive it) or no later than 3 business days after scheduling (this timeline applies when your primary item or service is scheduled at least 10 business days before you would receive it), depending on scheduling; or
    • Within 3 business days after an uninsured (or self-pay) consumer requests a good faith estimate.

The interim final rule also details the Independent Dispute Resolution (IDR) process that providers, facilities or providers of air ambulance services, and health plans or issuers will use to determine final payment beyond allowable patient cost-sharing for certain out-of-network healthcare services in situations where the No Surprises Act prohibits surprise billing. The Act’s provisions regarding the IDR process are discussed in greater detail below.

The Act’s dispute resolution process brings in a third-party known as a certified independent dispute resolution entity that will work with the health plan and provider or facility to decide the payment amount. More information on the federal independent dispute resolution process can be found in this general fact sheet.

On July 1, 2021, HHS issued an earlier interim final rule to implement many of the Act’s provisions.

A fact sheet published by the CMS provided this summary of this rule:

  • The interim final rule protects individuals from surprise medical bills for emergency services, air ambulance services provided by out-of-network providers, and non-emergency services provided by out-of-network providers at in-network facilities in certain circumstances.
  • Coverage – If a plan or coverage provides or covers any benefits for emergency services, the interim final rule requires emergency services to be covered:
    • Without any prior authorization (i.e., approval beforehand)
    • Regardless of whether the provider is an in-network provider or an in-network emergency facility
    • Regardless of any other term or condition of the plan or coverage other than the exclusion or coordination of benefits, or a permitted affiliation or waiting period
  • What do emergency services include? Emergency services include certain services in an emergency department of a hospital or an independent freestanding emergency department, as well as post-stabilization services in certain instances.
  • Cost sharing - The interim final rule also limits cost sharing for out-of-network services subject to these protections to no higher than in-network levels, requires such cost sharing to count toward any in-network deductibles and out-of-pocket maximums, and prohibits balance billing. These limitations apply to out-of-network emergency services, air ambulance services furnished by out-of-network providers, and certain non-emergency services furnished by out-of-network providers at certain in-network facilities, including hospitals and ambulatory surgical centers.

What Does the Act Provide?

The Act establishes standards for plans and providers to resolve payment for nonemergency services provided by non-participating (out-of-network) providers at participating (in-network) facilities, emergency services provided by non-participating providers and facilities, and air ambulance services. Under the Act, providers and plans must first attempt to resolve payment disputes between themselves before final resolution in a binding arbitration process.

For services rendered by a nonparticipating provider (e.g., physician) at a participating facility or at a nonparticipating emergency facility: providers may not bill beyond the allowed cost-sharing amount imposed under the plan or coverage for such services. An initial payment, determined by the plan, or a notice of denial of payment will be sent to the provider from the plan within 30-days from when the provider transmitted their bill to the plan. Following receipt of initial payment or denial of payment, there is a 30-day window for either party (the provider or plan) to initiate open negotiations. The open negotiation period is a 30-day period during which the provider and plan may negotiate an agreement to resolve payment. If an agreement cannot be reached during the open negotiation period, the plan or provider has 4-days (from the last day of the open negotiation period) to notify the other party and the Secretary of (HHS) that they are initiating the IDR process.

The Act’s IDR process establishes an arbitration procedure that allows independent review of provider-plan disputes. Within 3-days following the date the IDR is initiated, the provider and plan must jointly select a certified IDR entity. The parties may continue negotiating during the 30-day IDR process, and may agree on an amount of payment before the end of the IDR process (in such case both parties will share the cost to compensate the IDR entity). Within 10-days of IDR entity being selected, the parties must submit final offers, information requested by IDR entity, and additional information, subject to certain exceptions, the parties would like related to their offers.

The IDR entity has 30-days to select one of the offers. The Act lists the specific factors that the IDR entity may consider in making its decision. Note that the IDR entity cannot consider payment rates by public payors, including Medicare, Medicaid, CHIP, and Tricare rates. The party whose offer was not chosen by the IDR entity must pay IDR process costs. Payment, pursuant to the IDR entity’s determination, must be made to the provider within 30-days of the IDR entity’s decision.

Previous versions of the bill had included benchmark payment provisions instead of an arbitration process. In 2019, the Pennsylvania Medical Society (PAMED) sent a letter to congressional representatives urging reconsideration of a benchmark payment standard.

Where Can I Find Additional Information?

CMS has launched a website dedicated to the No Surprises Act, which can be accessed here.

Additional information on the Act can be found on the American Medical Association’s (AMA) website here.

The AMA has developed a detailed high-level summary of the Act, which can be accessed here, as well as a guide, which can be accessed here. The AMA also has developed an initial summary of the interim final rule, which can be accessed here

PAMED will continue to monitor implementation of the Act as well as the promulgation of accompanying regulations and provide updates accordingly.

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