Surprise – No Surprises Act – Part II Interim Final Rule
On September 30, 2021, the Department of Health and Human Services, the Department of Labor, the Department of Treasury, and the Office of Personnel Management released an interim final rule, “Requirements Related to Surprise Billing: Part II” (hereinafter referred to as the “Rule.”). The Biden administration describes the Rule as detailing: “how providers, facilities, providers of air ambulance services, and plans and issuers can negotiate payment for out-of-network bills and can access the federal arbitration process when these organizations can’t agree on payment arrangements, taking consumers out of the middle. The rule also addresses additional protections for uninsured (or self-pay) consumers who are seeking care and steps they can take if a medical bill is much higher than expected.” See here. The comment period for the Rule is open for 60 days beginning September 30, 2021.
Federal IDR Process. The Rule describes the IDR process that nonparticipating providers or facilities, nonparticipating providers of air ambulance services, and group health plans and health issuers in the group and individual market may use if they are unable to agree on the out-of-network rate for certain services and details specific timelines for the open negotiation and IDR process. The parties may mutually agree upon a certified IDR entity or, if the parties cannot agree on the IDR entity, the federal government will do so. The Rule also prohibits the use of a certified IDR entity that has a conflict of interest.
Once an IDR entity is agreed upon, each party must submit an offer for a payment amount for the item or service in dispute and other information as requested by the IDR entity within 10 business days of selection. The IDR entity must begin by using a presumption that the “qualifying payment amount” (“QPA”) is the appropriate out-of-network rate for the item or service. Importantly, the QPA is the average in-network rate for the same or similar items or services for the health plan. The IDR entity must select the offer closest to the QPA unless it determines that credible information submitted by either party clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate. The Rule also provides a number of factors that the IDR entity may consider when making its determination, however, the certified IDR entity may not consider usual and customary charges, the amount that would have been billed if the protections of the Surprise Billing Act had not applied, or any public payor payment or reimbursement rates. Because of the presumption given to the QPA and the exclusion of usual and customary charges, many provider groups believe the Rule is and will be skewed in favor of plans and issuers as claims are adjudicated.
Certification of IDR Entities. The Rule also sets forth the requirements for certification of IDR entities and contains a process to petition for the revocation of certification of an IDR entity. Certified IDR entities must also provide data regarding determinations to the federal government so the federal government can publish information on IDR payment determinations on a quarterly basis.
Additional requirements for Uninsured or Self-Pay Individuals. The Rule requires providers and facilities to inquire about an individual’s health coverage status and adds requirements for providing a good faith estimate to uninsured or self-pay individuals. New details regarding the contents of the good faith estimates and the manner of providing the good faith estimates are described. The Rule also sets out the proposed implementation of the patient-provider dispute resolution process for circumstances in which the provider or facility bills an uninsured or self-pay individual an amount substantially in excess of the expected charges in the good faith estimate. “Substantially in excess” is defined as an amount that is at least $400 more than the total amount of expected charges for the provider or facility described in the good faith estimate.
New CMS No Surprises Act Website. As a part of its rollout of the Rule, the government launched a website providing fact sheets, guidance, and technical resources regarding the No Surprises Act, consumer protection information, and a portal where organizations interested in being certified to conduct arbitration in the independent dispute resolution process may apply. The application process is open beginning September 30, 2021.