No Surprises Act: Interim Final Rule Released

On July 1, 2021, the U.S. Department of Health and Human Services (HHS), the Department of Labor, and the Department of the Treasury (collectively, the Departments), along with the Office of Personnel Management (OPM) released an interim final rule with comment period (“IFC” below), implementing portions of the No Surprises Act, which was enacted as part of the Consolidated Appropriations Act of 2021. Absent any change, this interim rule will become final on September 13, 2021 and will go into effect in 2022.

Background

The No Surprises Act protects health plan members who receive emergency care from balance-billing aka “surprise billing” by out-of-network (OON) providers. Effective January 1, 2022 and applicable to group health plans and health insurance issuers for plan years beginning on or after that date, the No Surprises Act will cap a plan member’s cost-sharing obligations for OON services to the plan’s applicable in-network cost-sharing level for the following three categories of services:

1. Emergency services performed by an OON provider or facility and post-stabilization care if the patient cannot be moved to an in-network facility;

2. Non-emergency services performed by OON providers at in-network facilities, including hospitals, ambulatory surgical centers, labs, radiology facilities, and imaging centers; and

3. Air ambulance services provided by OON providers.

As noted by the HHS in their July 1 press release, “Researchers estimate that 1 of every 6 emergency room visits and inpatient hospital stays involve care from at least one out-of-network provider, resulting in surprise medical bills.”

For additional background on the No Surprises Act, please see our previous article on the subject.

General Provisions and Definitions

The rule (IFC) implements many of the law’s requirements for group health plans, health insurance issuers, health care providers and facilities, and air ambulance service providers. The rule clarifies that the No Surprises Act does not apply to retiree-only plans, excepted benefits, short-term limited-duration plans, Health Reimbursement Accounts (HRAs), flexible spending accounts (FSAs), or health savings accounts (HSAs). It also does not address the independent dispute resolution process for settling disputes between payers and providers -- regulations on that aspect of the No Surprises Act are expected in the next few months.)

If a plan or coverage provides or covers any benefits for emergency services, this IFC 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.
• 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 (for covered services other than air ambulance services). The IFC clarifies that the No Surprises Act does allow the application of coordination of benefit rules (to the extent they do not otherwise conflict with the emergency services billing requirements) affiliation or waiting period requirements, and applicable cost-sharing requirements.

Emergency services include certain services in an emergency department of a hospital or an independent freestanding emergency department. It also includes post-stabilization services, unless all of the following conditions are met:

• The treating provider determines that the patient is able to travel using non-medical transportation to an available participating provider or facility within a reasonable travel distance;
• The provider or facility provides notice and obtains consent;
• The patient is in a condition to receive the information and provide informed consent; and,
• The provider or facility satisfies any additional requirements or prohibitions under the applicable state law.

The IFC also defines “emergency medical condition” to be a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that a prudent layperson with an average knowledge of health and medicine could reasonably expect to either (1) place their health in serious jeopardy, (2) seriously impar bodily functions, or (3) cause serious dysfunction to any bodily organ or part. The definition includes both mental health and substance use disorders. Plans must determine whether the standard has been met with a focus on the presenting symptoms, without imposing a time limit between onset of symptoms and presentation for emergency care, and without restricting coverage to instances of a “sudden onset” of the condition.

Determining Reimbursement Rates for OON Providers

The IFC provides that consumer cost-sharing amounts for emergency services provided by out-of-network emergency facilities and out-of-network providers, and certain non-emergency services furnished by out-of-network providers at certain in-network facilities, must be calculated based on one of the following amounts:

• 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.

Similarly, cost-sharing amounts for air ambulance services provided by out-of-network providers must be calculated using the lesser of the billed charge or the plan’s or issuer’s qualifying payment amount, and the cost sharing requirement must be the same as if services were provided by an in-network air ambulance provider.

Limited Consent for Out-of-Network Rates

In limited cases, the IFC allows a provider or facility to provide notice to a patient regarding potential out-of-network care, and obtain the individual’s consent for that out-of-network care and extra costs. However, this exception does not apply to ancillary services, which include items and services related to emergency medicine, anesthesiology, pathology, radiology, and neonatology. It also does not apply to 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 if there is no participating provider who can furnish such item or service at the facility. Finally, the notice and consent exception does not apply to items or services furnished as a result of unforeseen, urgent medical needs that arise at the time an item or service is furnished for which a nonparticipating provider satisfied the notice and consent criteria.

Notice to Consumers

The IFC also requires certain health care providers and facilities to make publicly available, post on a public website, and provide to individuals a one-page notice about:

• The requirements and prohibitions applicable to the provider or facility under Public Health Service Act sections 2799B-1 and 2799B-2 and their implementing regulations.
• Any applicable state balance billing limitations or prohibitions.
• How to contact appropriate state and federal agencies if someone believes the provider or facility has violated the requirements described in the notice.

Effective Dates

As mentioned above, the IFC is generally applicable to group health plans and health insurance issuers for plan and policy years beginning on or after January 1, 2022. The regulations that apply to health care providers, facilities, and providers of air ambulance services are applicable beginning on January 1, 2022.

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Prior Guidance:

• 1.9.21 - No Surprises Act: Relief from Surprise Medical Billing Becomes Law

The following links will be helpful to those seeking more information:

• 7.1.21 - Interim Final Rule and Comment Period: https://www.cms.gov/files/document/cms-9909-ifc-surprise-billing-disclaimer-50.pdf 
• 7.1.21 - CMS Fact Sheets: https://www.cms.gov/newsroom/fact-sheets/requirements-related-surprise-billing-part-i-interim-final-rule-comment-period and https://www.cms.gov/newsroom/fact-sheets/what-you-need-know-about-biden-harris-administrations-actions-prevent-surprise-billing

Additional Updates:

• 10.7.21 - Requirements Related to Surprise Billing; Part II
• 10.25.21- Surprise Billing Model Notice