On July 13, 2021, the Departments of Health and Human Services (“HHS”), Labor (“DOL”), and the Treasury (collectively, “the Departments”) jointly published an interim final rule implementing provisions of the No Surprises Act (“NSA”). This is the first set of regulations to address the NSA (“Part I Regulations”); additional rules are forthcoming, including guidance on the Independent Dispute Resolution (“IDR”) process.
Briefly, as it relates to group health plans, the regulations:
• Describe new notification obligations, including posting information about the surprise medical bill protections on the plan’s website as well as including such information in the Explanations of Benefits (“EOBs”) issued with respect to these services.
These rules take effect for plan years beginning on or after January 1, 2022, and apply to all group health plans (including grandfathered plans), except:
• Excepted benefits (e.g., dental and vision plans);
• Short-term limited duration insurance;
• HRAs and other account-based plans; and
• Retiree plans (plans with fewer than 2 participants who are current employees).
For fully insured group health plans, the carrier will be responsible for compliance.
For self-funded group health plans, the plan sponsor is responsible and will need to work closely with third- party administrators (“TPAs”) to comply with these rules. TPAs will likely need to update plan documents to reflect the changes required under the NSA and could pass additional administrative costs on to plan sponsors.
The following highlights some of the additional details from these rules. It will be important to discuss implementation and compliance with TPAs. The Departments request comments on numerous aspects of the rule by September 7, 2021.
As previously reported, with respect to group health plans (and health insurance carriers), the NSA provides protection as it relates to OON cost-sharing and “balance billing” with respect to:
Generally, the requirements of the NSA apply to the items and services described above unless the state has an “All-Payer Model Agreement” (“APMA”) (used by Maryland, Pennsylvania and Vermont) or state balance billing law (including Delaware, Massachusetts and Pennsylvania that applies.
In general, self-funded ERISA group health plans will be subject to the requirements of the NSA (versus state law or APMA). However, where state law allows, a plan sponsor may voluntarily “opt-in” to a state’s balance billing protections that provide a method for determining the cost-sharing amount or total amount payable under such a plan (versus the NSA). Currently four states – Nevada, New Jersey, Virginia and Washington – provide such an option. A plan that opts in to such a state law must do so for all items and services to which the state law applies.
Self-funded plans that opt-in to the state law must prominently display in their plan materials describing the coverage of OON items and services a statement that the plan has opted into a specified state law, identify the state (or states), and include a general description of the items and services provided by OON facilities and providers that are covered by the specified state law.
With respect to OON emergency services, non- emergency services furnished by an OON provider in an in-network facility and OON air ambulance services, the NSA requires the services be provided:
• without cost-sharing requirements that are greater than those that would apply if the services were provided in-network
The regulations further clarify that:
• Post-stabilization services are considered emergency services subject to the NSA unless certain conditions are satisfied.
• A plan that covers emergency services is prohibited from denying benefits to a participant with an emergency medical condition that receives emergency services based on a general plan exclusion.
Notice & Consent Exception for Non-Ancillary Services
In the case of non-emergency, non-ancillary services performed by an OON provider at certain in-network facilities, an exception to the prohibition on surprise medical billing may be permissible when the provider gives the patient advance oral and written notification and receives the patient’s signed consent. The rules provide the specific content, method and timing of the notice and consent communications and provides substantial detail on each of these components.
This exception does not apply to ancillary services. For this purpose, ancillary services include items and services:
• related to emergency medicine, anesthesiology, pathology, radiology, and neonatology, whether provided by a physician or non-physician practitioner;
With respect to OON air ambulance providers, APMA and state laws generally do not apply. Cost-sharing is determined based on the lesser of the QPA or the billed amount.
The QPA is the median of the contracted rates for a particular item or service plus an inflation adjustment. The rules around calculating the QPA are complicated and described in much detail in the regulations, including various special rules that apply (e.g., related to anesthesiology, new plans, and limited data). Briefly, the QPA is determined by:
1. Calculating a median contracted rate by arranging in order from least to greatest the contracted rates of all group health plans of the plan sponsor in the same insurance market for the same or similar item or service that is provided by a provider in the same or similar specialty or facility of the same or similar facility type and provided in the geographic region in which the item or service is furnished and selecting the middle number.
2. Adding an inflation adjustment (to be announced by the Departments annually).
Notably, for self-funded plans, the regulations define the “insurance market” as all self-insured group health plans of the plan sponsor or, at the option of the plan sponsor, all self-insured group health plans administered by the same entity that is responsible for calculating the QPA on behalf of the plan (in most cases, the TPA).
The plan will determine whether the services are covered by the plan. Within 30 days of receipt of a “clean claim,”1 the plan must send the provider an initial payment or notice of denial of the payment. The total amount paid by a plan for items and services is referred to as the “OON Rate.” Assuming APMA and state laws do not apply, the plan must make a total payment equal to one of the following amounts, less any cost sharing from the participant, beneficiary, or enrollee:
Employers should review these requirements with their carriers and TPAs for compliance effective with the first plan year that begins on or after January 1, 2022. As most of these requirements are functions of claim payment and adjudication, it will be important that vendors can support the changes required by the NSA. Self-funded health plans will want to ensure TPAs can meet these new requirements.
We expect additional guidance on the NSA, including the IDR process.
Mark Goldstein / 610-674-0990 / Goldmark Benefits / email@example.com
This blog is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You should not act or rely on any information contained herein without seeking the advice of an attorney or tax professional. ©2021 Emerson Reid, LLC. All Rights Reserved. CA Insurance License #0C94240.