On Thursday, September 30, 2021, The United States departments of Health and Human Services (“HHS”), Labor and Treasury released an interim final rule (“Rule”) that completes most of the regulatory framework under the federal No Surprises Act (“Act”). The Act largely bars balance billing of patients who receive emergency services or hospital-based provider services (at an in-network facility) on an out-of-network basis. This is the second part of the agencies’ rulemaking under the Act. The first part was released in July 2021. This second part deals primarily with the independent dispute resolution (“IDR”) process, which will determine the “appropriate out of network rate” to be paid to the provider by the health plan for a particular emergency or hospital-based provider service and a portion of the provider price transparency requirements under the Act.
The following are five things health care providers should understand about the new Rule.
- The Rule is final and its provisions will be operative January 1, 2022.
Although there is a 60 day public comment period regarding the Rule that begins when the rule is published in the Federal Register, the Rule will technically be effective immediately upon such publication with providers and plans being obligated to comply with its provisions on January 1, 2022, and thereafter.
- IDR Deadlines are Tight
Providers may initiate a 30-business-day open negotiation period for purposes of determining the applicable out-of-network payment rate beginning on the date the payer pays or denies the out-of-network claim. If an agreement cannot be reached, either the provider or the plan may initiate the IDR process within 4 business days after the end of the open negotiation period, and the parties must choose a certified IDR entity within 3 business days after the IDR process is initiated. Disputes for claims between the same provider or groups of providers (those in the same TIN or NPI) and the same plan for the same or similar services can be batched in 90-day increments by date of service for IDR purposes.
- The Plan’s Median Contracted Rate is Presumed to be the Appropriate Out-of-Network Rate in the IDR Process
In perhaps the most controversial aspect of the Rule, the parties have the burden to “clearly [demonstrate] that the [plan’s median contracted rate] is materially different from the appropriate out-of-network rate.” The IDR process involves a “baseball-style” arbitration process where both sides submit an offer to resolve the dispute. The certified IDR entity must choose the offer closest to the plan’s median contracted rate (referred to as the “qualifying payment amount” or “QPA”) unless one party meets the burden with “credible evidence” that the QPA is materially different than the appropriate out-of-network rate.
- There are Certain Factors that the IDR Entity Must Consider and Certain Factors it May Not Consider in Determining the Appropriate Out-of-Network Rate.
In determining which offer to select, the certified IDR entity must consider:
- The qualifying payment amount(s) for the applicable year for the same or similar item or service.
- Information requested by the certified IDR relating to the offers themselves.
- Additional information submitted by a party regarding:
- The level of training, experience, and quality and outcomes measurements of the provider or facility that is furnished.
- The market share held by the provider or facility or that of the plan in the geographic region in which the item or service was provided.
- The acuity of the patient or the complexity of furnishing the item or service to the participant, beneficiary, or enrollee.
- The training status, case mix, and scope of services of the facility that furnished the item or service, if applicable
- Demonstration of good faith efforts (or lack thereof) made by the provider or the plan or issuer to enter into network agreements and, if applicable, contracted rates with each other, during the previous 4 plan years.
In determining which offer to select, the certified IDR entity must not consider:
- Usual and customary charges (including payment or reimbursement rates expressed as a proportion of usual and customary charges).
- The amount that would have been billed by the provider for the service had the no Surprises Act not been in effect.
- The payment or reimbursement rate for items and services furnished by the provider payable by a public payor, Medicare, the Medicaid program, CHIP, TRICARE or demonstration projects under section 1115 of the Social Security Act.
- Providers Must Provide Good Faith Estimates of the Cost of Scheduled Items or Services to Uninsured (or Self-Pay) Individuals Starting on January 1, 2021, and the Rule Includes a Patient-Provider Dispute Process if the Estimate is Exceeded By an Amount in Excess of $400
In August 2021 HHS announced that it will defer enforcement of the requirement that providers and facilities provide good faith estimate information to individuals enrolled in a health plan for scheduled items or services who intend to seek reimbursement for such service plan until HHS promulgates regulatory guidance in rulemaking specific to the provision of good faith estimates to such individuals. However, the Rule still requires providers to provide uninsured and self-pay individuals/patients such good faith estimates in writing beginning on January 1, 2022, within no less than three days from the date the service is scheduled (one day if the service is scheduled between 3 and 10 days in advance) or within 3 days of a request by the patient. The provider who schedules the service or receives the request is also required to reach out to “co-providers” who may be involved in providing the “primary” scheduled item or service to include the co-provider’s fee in the estimate.
If the amount of the provider’s bill for the estimated service exceeds the good faith estimate by more than $400, the individual can request that the amount to be paid to be resolved by a selected dispute resolution (SDR) entity within 120 days of receiving the invoice for such services. In order to be awarded an amount in excess of the good faith estimated amount for the services through the SDR process, the provider must provide “credible information to demonstrate that the difference between the billed charge and the expected charge for the item or service in the good faith estimate reflects the costs of a medically necessary item or service and is based on unforeseen circumstances that could not have reasonably been anticipated by the provider when the good faith estimate was provided.”
The Rule contains a significant level of operational detail that affected providers will have to put in place in the next calendar quarter to become compliant by the effective date of the Rule’s operative provisions.