On July 1, 2021, the U.S. Department of Health and Human Services (HHS) issued the first Interim Final Rule with Comment (IFC Rule) implementing provisions to the No Surprise Act (NSA).

The IFC Rule proposes:

  • The methodology payers must use to determine cost sharing and the Qualifying Payment Amount (QPA),
  • Information payers must share with out-of-network providers,
  • The process for submitting and receiving consumer complaints,
  • And the format and details of the notice and consent requirements.

Background: As part of the Consolidated Appropriations Act signed into law December 27, 2020, the No Surprises Act was passed. This law is set to go into effect on January 1, 2022. The Act directs HHS to establish rules for various provisions of The Act through rulemaking. Under The Act, payers, and providers (including hospitals, facilities, individual practitioners, and air ambulance providers) are prohibited from billing patients more than in-network cost-sharing amounts in certain circumstances. The prohibition applies to both emergency care and certain non-emergency situations where patients do not have the ability to choose an in-network provider. The Act’s intent is not to preempt existing state laws, but due to variance among states, aims to provide coverage alongside state law to ensure broad protections.

Interim Final Rule: The IFC Rule established the methodology for calculating the QPA by defining similar items and services, providers and facilities, and geographic regions that will be used for calculating a median rate and the methodology for arranging contracted rates to determine a median amount. Additionally, the IFC Rule further clarifies provisions of the patient notice and consent process.

Emergency Services: Under the IFC Rule, plans that provide benefits for emergency services must do so:

  • 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.

Out-of-Network Services: An out-of-network provider will only be permitted to bill a patient more than the in-network cost-sharing amount for care, if the provider gives the patient notice of the provider’s network status and delivers to the patient, or their health plan, an estimate of charges within certain specified timeframes and obtains the patient’s written consent prior to the delivery of care.

  • Patient cost-sharing, such as co-insurance or a deductible, cannot be higher than if such services were provided by an in-network doctor, and any co-insurance or deductible must be based on in-network provider rates.
  • Bans out-of-network charges for ancillary care (like an anesthesiologist or assistant surgeon) at an in-network facility in all circumstances.
  • Bans other out-of-network charges without advance notice. Healthcare providers and facilities must provide patients with a plain-language consumer notice explaining that patient consent is required to receive care on an out-of-network basis before that provider can bill at the higher out-of-network rate.

Determining Out-Of-Network Rates: The No Surprises Act defines the QPA as the median of contracted rates for similar services in a particular geographic area adjusted by the consumer price index to minimize the influence of high outlier rates.

Under this IFC Rule, the total amount to be paid to the provider or facility, including any cost sharing, is based on:

  • 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 by 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.

Under the NSA, plans and issuers must calculate the median contracted rate for an item or service using contracted rates for “the same or similar item or service” provided in the “geographic region” in which the item or service is furnished. “Same or similar item or service” means a healthcare item or service billed under the same Current Procedural Terminology (CPT), Healthcare Common Procedure Coding System (HCPCS) or Diagnosis-Related Group (DRG) service code, or a comparable code under a different procedural code system. If contracted rates vary due to a modifier, medical specialty, or facility type, they must be calculated separately.

A health plan issuer is deemed to have sufficient information to calculate the QPA so long as there are at least three provider contracts for a given service in a given region. The IFC Rule defines geographic regions for the QPA as one for each Metropolitan Statistical Area in a state and one for all other regions in the state. The IFC Rule also covers how to determine if services are similar and what is considered insurers’ normal practices in contracting with providers.

Additionally, payers are directed to share with providers certain information about the QPA as part of the initial payment or notice of denial. This information about the QPA is to assist providers in determining whether to initiate the IDR process and provide clarity on how the payer calculated the initial payment.

Patient Notice and Consent: The Act prohibits certain out-of-network providers from balance billing patients unless the provider gives the patient notice of their network status and an estimate of charges 72 hours prior to receiving out-of-network services and the patient provides consent to receive out-of-network care.

With respect to non-emergency services, the notice and consent exception does not apply to ancillary services, which include items and services related to emergency medicine, anesthesiology, pathology, radiology, and neonatology, whether provided by a physician or non-physician practitioner; items and services provided by assistant surgeons, hospitalists, and intensivists; diagnostic services, including radiology and laboratory services; and items and services provided by a nonparticipating provider, only if there is no participating provider who can furnish such item or service at such facility.

 Resources for the No Surprises Act Interim Final Rule

A second regulation is expected by Oct. 1, 2021 and will establish an audit process. The third regulation is expected by Dec. 27, 2021 and will detail the independent resolution dispute (IDR) process. As always, ADVOCATE will continue to keep you informed on the issues impacting medical groups as they develop.

Colton Zody, JD, CHC

Chief Compliance Officer