No Surprises Act (NSA) – Interim Final Rule
The Interim Final Rule was issued by the U.S. Office of Personnel Management and the Departments of Health and Human Services, Labor, and Treasury on July 1, 2021 and takes effect January 1, 2022. The rule focuses on how to determine member cost-sharing amounts and the payment amounts to providers and facilities for certain types of surprise bills. We provide a high-level overview of the lengthy regulation below and you may also access the entire rule here.
Other aspects of NSA requirements are forthcoming. Rulemaking on the independent dispute resolution process is expected to be distributed near the end of 2021. Regulations regarding ID cards, continuity of care, provider directories, and gag clauses may not be issued until after January 1, 2022, but will include a prospective effective date to give plans reasonable time to implement the requirements. Until then, plans must use a “good faith, reasonable interpretation of the statute”.
Types of Services Subject to the NSA Protections
Emergency services, non-emergency services performed by out-of-network providers at in-network facilities, and air ambulance services are subject to protections under the NSA.
Emergency Coverage Requirements
The NSA defines emergency services to include includes a medical screening exam (including routine ancillary services needed to evaluate someone’s condition), further treatment to stabilize the individual, and post-stabilization services. If a group health plan provides benefits for these services in a hospital emergency department or in an independent freestanding emergency department, then the NSA applies and they must cover emergency services in the following manner:
• Without any prior authorization determination, even if the services are provided on an out-of-network basis
• Regardless of in-network or out-of-network status
• Without imposing any administrative requirement, coverage limitations, or cost-sharing requirements that are more restrictive than those imposed on in-network providers and facilities
It is important to note that the definition of “Independent Freestanding Emergency Department” includes urgent care centers that are licensed by a state to perform emergency services.
Determination of Cost-Sharing Amounts
The member cost-sharing amount must be calculated based on all-payer models (if applicable), state law requirements, or if the former do not apply, the lesser amount of either the billed charge or the qualifying payment amount.
Methodology for Calculating Qualifying Payment Amount (QPA)
The plan must calculate the QPA by increasing the median contract rate for the same or similar item or service on January 31, 2019, by the combined percentage increase due to inflation, as published by the Department of Treasury. The combined percentage increase and any increase after 2022 will be published by the IRS. There are special rules for anesthesia services and air ambulance services.
Median Contracted Rate
The median contracted rate is determined with respect to all group health plans of the plan sponsor. The rules permit, but do not require, plan sponsors to allow their TPAs to determine the QPA by calculating the median contracted rate, using the contracted rates recognized across all self-funded group health plans administered by the same TPA.
The median contracted rate for an item or service is calculated by arranging in order, from least to greatest, the contracted rates of all plans of the plan sponsor for the same or similar item or service, delivered by a provider in the same or similar specialty, in the same or similar facility type, and provided within the same geographic region as the furnished item or service, and then selecting the middle number. The regulations include definitions of “same or similar specialty” and “geographic region”.
A single case agreement between a plan and a provider does not constitute a contract, and the rate paid under such an agreement should not be counted among the plan’s contracted rates. The term “contracted rate” refers only to the rate negotiated with providers and facilities that are contracted to participate in any of the networks of the plan.
OON Payment Amounts to Providers
The total amount paid to the provider is referred to as the “out-of-network rate”, which is based upon:
• 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 state law;
• If neither of the above are available, then an amount agreed upon between the plan and the provider;
• If an agreement cannot be reached, then the amount determined by an Independent Dispute Resolution entity.
Notice and Consent Exception
Providers and facilities, in non-emergency situations, must provide plain-language notices informing patients of the provider/facility out-of-network status and obtain their consent before treating them. These requirements do not apply to post-stabilization or out-of-network non-emergency, other than air ambulance. Providers will be required to notify plans if consent is obtained and if a plan does not receive this notice, it must assume that balance billing protections are in place.
Provider and Plan Public Disclosures
Plans, insurers, providers and facilities must post a publicly available notice about NSA’s patient protections and balance billing requirements on their websites. Plans and insurers must also include this disclosure on every explanation of benefits for items or services that fall under the NSA. All entities mentioned here must also provide contact details for state and federal agencies regarding complaints. Model Notices for these requirements have been issued.
WebTPA is reviewing the guidance provided in this interim rule and outlining the process implications to claims processing, plan documents, benefit grids, etc. We will continue to provide updates as more information and decisions are made regarding changes.