Explaining the No Surprises Act

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The No Surprises Act aims to address surprise medical billing at the federal level

The vast scope of the No Surprises Act—legislation signed into law in late 2020—may mean some Society for Vascular Surgery (SVS) members are not aware of its provisions.

The No Surprises Act is part of the Consolidation Appropriateness Act of 2021 to address surprise medical billing at the federal level. In 2021, the Department of Health and Human Services (HHS) published interim final rules, “Requirements related to Surprise Billing” parts I and II. The underlying premise is to protect patients from surprise bills for emergency services and certain scheduled services provided by out-of-network clinicians at in-network facilities while providing greater transparency for healthcare costs. The act, which took effect on Jan. 1, 2022, outlines professional reimbursements for out-of-network services and establishes an independent dispute resolution process to help facilitate provider reimbursement from health plans.

What’s in the act? Let’s start with emergency services. Under this new legislation, patients will not be subject to bills by out-of-network providers at in-network facilities beyond those expected if the care had been completely in-network. The health plan must reimburse the provider directly rather than bill through the patient. The patient’s share, often the “surprise bill,” will be based on a cost-sharing obligation (co-pay/deductible for emergency services) at his or her existing in-network rate. But what is the actual out-of-network rate? The new rate for professional reimbursement will be based on the “recognized amount” and “qualifying amount.” Under these concepts, the reimbursement is determined by specified state law or All Payer Model agreement, if applicable. If neither apply, as in most cases, then the out-of-network rate is determined by an agreement between the provider and the payer but will most likely default to the qualifying payment amount (QPA). The QPA will be based on the health plan’s median in-network rate for the same or similar services. Therefore, the provider will receive an “out-of-network” reimbursement based on any state laws (i.e., all-payer rate-setting model), a rate agreed upon by the payer and provider, or the QPA.

What about non-emergency services performed by out-of-network providers at in-network facilities (i.e., the provider sees a hospital consult but is out-of-network while the hospital is in-network)? The patient will pay the same as expected had the provider been in-network. The provider will be reimbursed based on the QPA and may not balance-bill (charge patients the difference) for certain services unless they meet the notice and consent for out-of-network services guidelines.

However, certain provisions can affect reimbursement for our services. What happens if there is a dispute between the health plan and the provider? The No Surprises Act provides legal recourse through arbitration. The independent dispute resolution (IDR) is a binding process to settle these differences and has been described as a “baseball style” arbitration where each party submits their case and expected payment. While the IDR can consider other factors such as level of training, patient acuity and teaching status, among others, they have been directed that the QPA is the most significant factor when deciding between offers. This raises concerns as it deviates from the original guidelines for determining reimbursement. In particular, if a physician or group fails to agree on reimbursement rates and subsequently does not contract with the health plan, they are considered out-of-network—even if the facility is in-network. According to the No Surprise Act, the health plan would reimburse these clinicians based on the QPA (the plan’s median in-network rate), essentially bypassing any prior negotiations and potentially adversely affecting any other negotiations going forward.

Finally, for those uninsured/self-pay patients, or those who pursue self-payment if services are denied by their health plans, the “convening” provider (primary provider) will be required to provide a Good Faith Estimate for all scheduled services (>3 days out), or upon request by the patient. This estimate will provide expected charges for all services, both professional (including co-providers or any other clinician that will be providing billable services) and facility-based. For a surgical procedure, these charges should include the surgery, any labs or tests, and anesthesia care. While the co-provider provision has been delayed until Jan. 1, 2023, all other services and their associated charges and discounts must be provided in an itemized fashion for the patient’s review prior to any intervention. There are rigid timeline requirements and penalties, as well as recourse, if actual costs are higher than estimates (currently ≥$400 difference can trigger an appeal). This will require coordination between provider(s) and medical facilities to ensure appropriate estimates and subsequent reimbursement. Lastly, this rule does not impact any bills generated when both the provider and facility are out-of-network.

This bill covers numerous other issues such as batch claims, audit processes, price comparison tools, continuity of care, etc., which are well beyond the scope of this article. We advise all providers to converse with their medical facility and/or group practice managers to help formulate a plan. Clinicians should also utilize resources provided by national organizations such as the American Hospital Association (AHA) and American Medical Association (AMA) to ensure up-to-date information.

References:

  1. https://rules.house.gov/sites/democrats.rules.house.gov/files/BILLS-116HR133SA-RCP-116-68.pdf
  2. https://www.cms.gov/newsroom/fact-sheets/requirements-related-surprise-billing-part-ii-interim-final-rule-comment-period

Francesco Aiello, MD, is a member of the SVS Coding Committee, a professor of surgery at the University of Massachusetts Medical School, and chief medical officer of Revenue Management, UMass Memorial Health. Angela L. Confoey, MHA, is associate vice president in the Hospital Central Billing Office at UMass Memorial Health.

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