- On July 1, 2021, the U.S. Departments of Health and Human Services, Labor, Treasury and the Office of Personnel Management (OPM) released an interim final rule with comment period (IFC) that implements sections of the federal ban on surprise medical bills.
- The No Surprises Act was included in the Consolidated Appropriations Act, 2021 and will take effect on January 1, 2022. The Act prohibits surprise bills (including OON cost-sharing and balance-billing amounts) for individuals covered by group health plans and health insurance issuers of group and individual health insurance coverage.
- HFMA’s Shawn Stack reviews the four key provider challenges introduced by the IFC, including the IFC’s proposal to use a “simple median,” instead of a weighted median, for calculating the average hospital contract rate on services to set the qualifying payment amount.
On July 1, 2021, the United States Departments of Health and Human Services (HHS), Labor, Treasury and the Office of Personnel Management (OPM) released an interim final rule with comment period (IFC) that implements sections of the federal ban on surprise medical bills enacted by Congress in December 2020.
Key provider challenges introduced by the IFC include:
- The IFC proposes to use a “simple median,” instead of a weighted median, for calculating the average hospital contract rate on services to set the qualifying payment amount (QPA).
- The rule does not provide detail into the calculation of the QPA. Based on the IFC, the disclosure of specific hospitals and rates used to form the QPA calculation will not be disclosed.
- The IFC does not allow for delineation between types of hospitals in the calculation of QPAs, not considering the facilities provision of medical services. The only allowance outlined in the rules is regarding free-standing versus hospital EDs for emergency services when delineating the QPA.
- The Notice of Consent outlines strict timelines to secure patient signature prior to delivering out-of-network (OON) medical services (including post-stabilization services), a constraint that would delay medical services on average three to four hours.
The No Surprises Act (“The Act” or “NSA”) was included in the Consolidated Appropriations Act, 2021, and will take effect on January 1, 2022. The Act prohibits surprise bills (including OON cost-sharing and balance-billing amounts) for individuals covered by group health plans and health insurance issuers of group and individual health insurance coverage when:
- Receiving emergency services (and post-stabilization services) furnished by a nonparticipating provider, nonparticipating facility or out-of-network air ambulance services.
- Receiving non-emergency services, furnished by nonparticipating providers in participating facilities. Exceptions may apply for post-stabilization and nonemergency services if certain conditions are met — for example, if the individual is provided with a compliant notice and consents to receiving non-emergency services from nonparticipating providers and to paying the OON cost-sharing and balance-billing amounts. In addition, the Act protects enrollees against surprise billing if the enrollee relied on inaccurate provider network status information in the health plan’s directory about a provider when obtaining care.
Defining the qualifying payment amount for patients and providers
The No Surprises Act mandated that the tri-agencies issue regulations on how payers should calculate the QPA. The QPA will be used to determine the cost-sharing for patients being treated out-of-network and out-of-network provider reimbursement. The No Surprises Act defined the QPA as the median of the contracted rates recognized by the plan, across all plans of the sponsor that are offered in the same market, as of January 31, 2019, for the same or similar service that is provided by a provider in the same or similar specialty and provided in the geographic region in which the item or service is furnished.
Defined in the IFC, the total amount to be paid to an OON provider, including any cost sharing, is to be based on:
- An amount determined by an all-payer model agreement in place in a given state, if applicable
- If no all-payer model agreement in place, an amount determined under state law
- If no applicable state law, an amount agreed upon by the plan or issuer and the provider or facility
- If no agreed upon rate, an amount determined by an IDR entity
While the IFR differentiates between free-standing and hospital EDs when setting payment amounts, the rule clarifies that hospital type should not be considered when setting QPAs. The agencies explain that because patients are likely to seek emergency care from the closest ED and that patients should not have to pay higher copays based on a higher QPA when the facility characteristics may impact contract rates, ignoring hospital specific trauma levels and/or array of emergency services.
Patient notification and consent requirements
The IFC also outlines a consumer notification requirement that certain providers and facilities must offer to consumers before balance billing the patient for OON cost-sharing amounts when providing OON services under certain situations. The notice must also be made publicly available and be posted on a public website of the provider, if applicable. Providers must provide a one-page notice to individuals with the notifications. HHS has created a model notice that providers can use to ensure compliance with the requirements.
The rule clarifies that balance billing is only permitted for non-emergency services performed by OON providers at certain in-network facilities when a notice and consent are obtained from the patient at least 72 hours prior to the medical service(s) being delivered, with the patient’s signed consent agreeing to the OON cost-sharing amounts.
The agencies then outline in the rule that in certain circumstances, following emergency services, OON cost sharing will apply to OON post-stabilization services, furnished on an inpatient or outpatient basis, if the following conditions are met:
- The individual is stable, and the provider or facility determines that the individual is able to travel using nonmedical transportation or non-emergency medical transportation
- The provider furnishing the additional items and services satisfies the notice and consent criteria
- The individual is in a condition to receive the information and to provide informed consent (in accordance with State law) and such other conditions as specified by the State, such as conditions relating to coordinating care transitions to participating providers and facilities
These strict consent timelines will most likely prove to be non-starters for providers when trying to deliver timely care to OON patients seeking post-stabilization care. Delaying post-stabilization care for three to four hours to patients is not optimal or in many cases operational, and alternatives need to be considered by the agencies when issuing notifications and consent to patients seeking care.
Providers must perform an impact analysis on the outlined QPA formula provided in the IFC and submit comments and recommendations to the tri-agencies to strengthen, clarify and fairly set reimbursement and patient co-insurance amounts for out of network non-emergency and post-stabilization medical care.
I also encourage health systems and providers to closely review the notification and consent requirements outlined in the IFC to identify and share feedback on potential delays in patient care, operational workflow challenges and opportunities to improve the patient, payer and provider collaboration.