5 Things to Know About the No Surprises Act
On July 1, HHS and other federal departments issued a 411-page Interim Final Rule (IFR) to implement the No Surprises Act passed by Congress in late 2021. These provisions go into effect January 1, 2022. We highlight 5 things to know about the No Surprises Act:
- Billing at of out-of-network (OON) rates will be much more difficult
- Most/all emergency situations, including most follow-up care must be paid at in-network rates
- This includes most hospital-based providers, not just ER physicians
- Non-emergency care will require substantial advance notice, including a good faith estimate of costs provided to the patient
- Emergency treatment at hospital ERs and free-standing ERs will essentially be paid at in-network rates
Specifically, the IFR requires emergency services to be covered
- Without prior authorization.
- Regardless of whether the provider is an in-network provider or an in-network emergency facility.
- Without limiting what constitutes an emergency medical condition solely on the basis of diagnosis codes.
Initial emergency care, post stabilization and potentially follow-up in-patient treatment are included in the definition of “emergency.”
- Emergency treatment includes “ancillary services”; i.e. most hospital-based providers
In addition to emergency medicine, anesthesia, radiology, pathology, hospitalist, neonatology and other “ancillary services” are included in the provisions.
- While the payment rules are complex, patients must pay no more than their in-network deductible and cost share
The “No Surprises Act” limits what patients pay in these scenarios to their in-network cost-sharing amount. It also applies this cost-sharing to their in-network deductible and annual out-of-pocket maximum, prohibits the patient from being balance billed for any additional amount, and removes the patient from the reimbursement dispute process between their health plan and the OON Provider.
The patient’s cost-sharing is not based on the total OON charge. Rather, it is based on a “qualifying payment amount (QPA).” The IFR defines the “qualifying payment amount” as the lesser of the billed charge or the health plan’s median contracted rate unless otherwise specified by a state’s law or by an All-Payer Model Agreement.
The IFR details how health plans must calculate the median rate for the QPA. The agencies will conduct regular audits of health plans to ensure compliance with how the QPA was calculated.
Payment must meet these criteria
- An amount determined by an applicable All-Payer Model Agreement under section 1115A of the Social Security Act.
- If there is no such applicable All-Payer Model Agreement, an amount determined under a specified state law.
- If there is no such applicable All-Payer Model Agreement or specified state law, an amount agreed upon by the plan or issuer and the provider or facility.
- If none of the three conditions above apply, an amount determined by an independent dispute resolution (IDR) entity.
The IFR leaves the IDR to be defined later.
- For non-emergency situations, prepare for notices and consents
If you practice in an in-network hospital but are not in-network with a patient’s insurance, you must provide an electronic or paper notice. The notice is intended to prevent surprise bills when the patient incorrectly assumes the services will be in-network. The notice is to include charge estimates and alternative in-network providers available (if any) and a clear statement that consenting to out of network services is optional and that in-network providers may be available.
Notice and consent can only be sought for certain non-emergency services or certain post-stabilization services.
To balance bill for post-stabilization services, an OON provider or emergency facility must provide notice and get consent from the (stabilized) patient but only if these four conditions are met.
- The treating provider must determine that the patient is able to travel using nonmedical transportation to an in-network provider or facility within a reasonable travel distance, taking into consideration the individual’s medical condition;
- The provider/facility must satisfy notice and consent criteria (a model notice was published simultaneously with the IFR);
- The participant or their authorized representative must be in a condition to provide informed, voluntary consent; and
- The provider/facility must satisfy any additional state law requirements.
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