The No Surprises Act
This new law will reduce out-of-network reimbursement for physicians and also threatens to strip physicians of their network contract bargaining power.
What Is the No Surprises Act?
The 2020 No Surprises Act (NSA) established new federal protections against surprise medical bills and balance billing took effect beginning January 1, 2022. Enforcement of some aspects will be delayed until further rulemaking or guidance has been issued. CMS has developed a centralized site where it will be posting future No Surprises Act implementation documents, and ASPS will provide updates and clarifications as they become available.
The No Surprises Act (NSA) contains a provision that allows for a “Specified State Law” to apply instead of the NSA in certain situations if the law provides for “a method for determining the total amount payable under a group health plan or a plan offered by a health insurance issuer to the extent such State law applies for an item or service furnished by a nonparticipating provider or nonparticipating emergency facility.” As a result, the applicability of the law will differ from state-to-state.
The Center for Medicare and Medicaid Services (CMS) Center for Consumer Information and Insurance Oversight (CCIIO) issues state-by-state letters with details in three areas related to the applicability and enforcement of the NSA within a state:
- Whether CCIIO has determined that the state has a “Specified State Law”- Note that where there is a Specified State Law, it may only cover some disputes with the NSA provisions covering others. The letters do not provide detailed information on which disputes will fall under state regulation, so additional information will be necessary to triage disputes through different regulatory mechanisms. However, some of the letters make clear that all disputes in certain states will be subject to the federal NSA provisions.
- Whether the state or federal dispute resolution process for uninsured/self-play claims applies.
- Whether the state or the federal Department of Health and Human Services (HHS) will be the overall NSA enforcement entity, or whether there will be a collaborative enforcement agreement between HHS and a state.
CCIIO is posting these letters as they are finalized, and you are encouraged to read your state enforcement letter for insight into how out-of-network encounters with different types of insurance statuses will be reimbursed and evaluated should a dispute arise. Please check back here for more resources detailing state-by-state rules.
When individuals do not have an opportunity to select in-network providers, The No Surprises Act (NSA) protects them from large and unexpected surprise bills.
- For both emergency and non-emergency services, patient cost-sharing (e.g., coinsurance, deductibles) cannot be higher than if such services were provided by an in-network doctor. Any coinsurance or deductible must be based on in-network provider rates.
- For non-emergency services, physicians must provide patients with a plain-language notice explaining that patient consent is required to receive care on an out-of-network basis before that provider can bill at the higher out-of-network rate. If the provider fails to do this, then cost-sharing cannot be more than in-network rates.
- Additionally, the regulations implementing the NSA stipulate that uninsured or self-pay patients are also entitled to receive clear and understandable documentation of all expected costs associated with the care they are considering or are scheduled to receive.
- Require health care facilities and providers to provide a one-page, plain-language explanation of the No Surprises Act and disclose its requirements and prohibitions to both the public and patients with applicable health care plans.
- Require this notification to include information regarding the process through which patients can complain about alleged violations.
- Require the disclosure to be publicly posted, available on a public portion of a provider or facility's website and provided to applicable patients prior to the patient receiving a bill.
Providers, facilities and health plans that bill patients in violation of the No Surprises Act are subject to civil monetary penalties of up to $10,000.
- In determining what penalty to impose, CMS may consider a variety of factors, including the degree of culpability, history and frequency of prior violations, the impact on affected individuals, the gravity of the violation and whether any violations have been corrected.
- The penalty will be waived if a provider or facility does not knowingly violate and should not have reasonably known it violated the act, and reimburses any incorrect payments plus interest back to the patient.
- There is also a hardship exemption to the civil monetary penalties.
Within 30 days, a provider or facility may request a hearing regarding the civil monetary penalty with an administrative law judge. They may also appeal the ruling of the administrative law judge to the U.S. Court of Appeals for the circuit in which the provider or facilities provides services or where the violation occurred.
In an emergency, an individual usually receives care at the nearest emergency department. Even if they go to an in-network hospital for emergency care, they might get care from an out-of-network or "OON" provider at that facility. For non-emergency care, an individual might choose an in-network facility or an in-network provider, but not know that a provider involved in their care (for example, an anesthesiologist, radiologist, or surgeon) is an OON provider. Historically, a person in these circumstances may have received a surprise bill from an OON provider that was higher than the amount they would otherwise pay or had planned for their in-network care.
There is currently no mechanism for a patient to waive No Surprise Act protections for emergency services.
Emergency Care Under the NSA
- Emergency care includes screening and stabilizing treatment sought by patients who believe they are experiencing a medical emergency.
- The No Surprises Act defines emergency services to also include post-stabilization services provided in a hospital following an emergency visit. Post-stabilization care is considered emergency care until a physician determines
- the patient can travel safely to another in-network facility using non-medical transport,
- that such a facility is available and will accept the transfer, and
- that the transfer will not cause the patient other unreasonable burdens.
- Health plans that offer emergency coverage must provide it without regard to whether a facility or the provider is in-network or out-of-network.
- Health plans also cannot deny claims for emergency coverage based on an after-the-fact assessment of the care provided, any purported delay between when symptoms began and when the patient sought care or based on how long the symptoms were present.
Effective January 1, 2022
- Emergency services, regardless of where they are provided, must be treated on an in-network basis without requirements for prior authorization.
- Patient cost-sharing (e.g., copayments, coinsurance, or a deductible for emergency services) cannot be higher than if such services were provided by an in-network provider. Any cost-sharing obligation must be based on in-network provider rates.
- Any "balance billing" of costs in excess of the recognized in-network rate and/or cost-sharing is prohibited.
Patient Cost-Sharing and the Qualified Payment Amount (QPA)
For emergency services, patient payments are limited to the patient's cost-sharing and deductible requirements for in-network care. For example, if a patient's health plan has a 20% coinsurance requirement for in-network emergency care, that same 20% requirement applies to out-of-network emergency care.
Patient cost-sharing calculations are applied to the lesser of the facility or provider's billed amount or the Qualified Payment Amount (QPA).
The QPA is the median of the contracted rates recognized by the health plan on January 31, 2019, for the same or similar item or service provided by a similar provider in the same geographic region and indexed for inflation.
Health plans must make payment directly to the facility and provider, indicating the total amount the plan believes it owes within 30 days of receiving a clean claim.
- The plan will provide a notice of the QPA, how it was calculated and a notification of the right to enter into a 30-day negotiation period related to the plan's payment, including contact information for the person at the plan responsible for such negotiations.
- The health care facility or provider will assess whether to accept the plan's payment or negotiate for a higher amount.
- If the health care facility or provider enters into negotiations and cannot reach a resolution within 30 days, the facility or provider has four days to initiate independent dispute resolution (IDR) regarding the payment amount.
Independent Dispute Resolution (IDR)
The Federal Independent Dispute Resolution (IDR) process is the process in which arbitrators decide certain disputes between providers and payors. Many details about the IDR process related to payments for out-of-network services are forthcoming, but CMS has indicated the following:
The Federal IDR process will only be used for disputes for which no state law applies.
- The party that initiates IDR must do so via an HHS online portal.
- They will select a certified IDR entity and send written notice to the other party.
- The responding party may agree to the IDR entity or object and propose a different entity.
- Both parties must pay the IDR filing fee (between $200 and $500 for 2022) upfront.
- Each party will submit an offer within 10 days after the IDR entity is selected.
- The offer must include a proposed payment amount and information regarding the following factors:
- The calculated QPA
- The provider's training and experience
- The complexity of the procedure or medical decision-making
- The patient's acuity
- The market share of the health plan and the provider or facility
- Whether the care was provided at a teaching facility
- The scope of services
- Any demonstration of good faith efforts to agree on a payment amount; and
- The contracted rates from the prior year
- The arbitrator will then choose one of the two proposals as the amount of the payment.
- Under the current regulations, the arbitrator cannot come up with his or her own payment amount.
- Arbitrators are paid through fees assessed to the entities that use the IDR process.
- Arbitration is imposed on the losing party, with the prevailing party receiving a refund of their filing fees.
- The party that initiates the arbitration process is "locked out" from taking the same party to arbitration for the same item or service for 90 calendar days following a decision. The goal of this provision is to encourage settlement of similar claims. Any claims that occur during the lockout period, however, qualify for arbitration after the period ends.
- Regardless of the outcome of the IDR process and the final payment amount, participant cost-sharing will not be impacted.
Many details regarding how the IDR process will be enacted and enforced are still forthcoming.
A surprise billing situation can arise when a health plan enters into a special arrangement with a health care facility to provide certain care in-network but does not reach a similar agreement with all of the providers with privileges at that facility.
They can also arise when services are provided by professionals the patient does not choose, such as anesthesiologists or radiologists, or when a surgeon is called into the OR to help address unexpected complications. (e.g., closure of large surgical defects, muscle transfers, etc.)
- These regulations broadly define covered non-emergency services to include treatment, equipment and devices, telemedicine services, imaging and lab services and preoperative and postoperative services.
- The interim final regulation defines "facility" to include hospitals, hospital outpatient departments, urgent care facilities licensed to provide emergency services and ambulatory surgery centers.
There are notice and consent provisions that will allow a patient to agree to receive services from an out-of-network provider at an in-network facility and essentially waive the balance billing protections.
- Any waiver of the No Surprises Act protections and consent to payment of out-of-network fees should be the exception for patients, rather than the rule.
- Patients cannot agree to waive out-of-network care for any complications that may arise, for example, during a surgical procedure, that would require assistance from an out-of-network provider.
CMS has developed Model disclosure language and Standard Notice and Consent forms that all physicians should use.
- Model Disclosure Notice Regarding Patient Protections Against Surprise Billing
- Standard Notice and Consent Surprise Billing Protection Forms for Nonparticipating Providers
If a provider seeks to have a patient waive the No Surprises Act's protections, the provider has to give the patient a detailed written consent form at least 72 hours prior to a scheduled appointment or three hours before a same-day appointment.
Without agreement from the patient to waive protections, the most that may be billed to the patient is any deductible or in-network cost-sharing amount.
The Notice and Consent waiver IS NOT permitted for:
- Emergency services
- Unforeseen urgent medical needs arising when non-emergent care is furnished
- Ancillary services, including items and services related to emergency medicine, anesthesiology or pathology
- Items and services provided by assistant surgeons
- Diagnostic services including radiology and lab services
- Items and services provided by an out-of-network provider if there is not another in-network provider who can provide that service in that facility
If a patient declines to waive the No Surprises Act protections, an out-of-network provider can refuse to provide treatment, unless there is no in-network option or another law barring such a refusal.
An out-of-network provider cannot pressure a patient into waiving their rights, including by delaying necessary treatment or charging cancellation fees for existing appointments.
More details about the required consent process will be forthcoming in future regulations, including more details on the provision for an Advanced Explanation of Benefits.
The No Surprise Act entitles consumers using insurance to receive a good faith estimate of expected charges and an "advanced" EOB from their payer to alert them of out-of-pocket expenses.
- The good faith estimate requirement is triggered when an individual schedules health care services or requests the information. In response, providers and facilities must notify the patient and their plan or insurer of an estimate of expected charges for those services with expected billing and diagnostic codes.
- Once the provider has sent a health plan a "good faith estimate" or a member requests an estimate directly to the health plan, an insurer must send the member an Advanced EOB. Additionally, if the scheduled appointment is at a minimum of 10 days out, the plan must send an Advanced EOB within three business days of the notification. If the service occurs in less than 10 days, an insurer must send an Advanced EOB within 1 business day.
- The Advanced EOB must have the following 8 items:
- Information about whether the provider/facility is in-network.
- If the provider is in-network, insurers must include contract rate information
- If out-of-network, the health plan needs to include information about accessing in-network providers
- The "good faith estimate" from the provider or facility. That information should include likely billing and diagnostic codes.
- A "good faith estimate" of what the plan will pay.
- An estimate of the member's cost-sharing amount.
- A "good faith estimate" of how the member is progressing toward their plan limits on things like deductibles and out-of-pocket costs.
- The Advanced EOB should indicate prior authorization requirements if any.
- A specific disclaimer that the Advanced EOB is an estimate based on information known at the time and could change.
- Any other information or disclaimers the health plan deems appropriate.
- Information about whether the provider/facility is in-network.
Health insurers must deliver Advanced EOBs by mail or electronic methods, whichever the member prefers.
Future rulemaking is expected to clarify multiple aspects of the Advanced EOB.
Under the NSA, an uninsured (or self-pay) individual individuals (defined respectively as “individuals with no insurance coverage or short-term, limited-duration insurance" and “individuals enrolled in individual or group health insurance coverage but not seeking to have a claim submitted to the insurance plan for coverage”) is entitled to a Good Faith Estimate (GFE): a clear and understandable document that details the expected costs associated with the care that they are considering or are scheduled to receive.
Effective January 1, 2022, a provider or facility must inquire and determine if an individual meets the definition of an uninsured (or self-pay) individual, and if they do, provide them with a GFE when one is requested, or services are scheduled. This includes individuals considering or scheduled for medical aesthetic/cosmetic items or services.
While physicians are not required to use it, CMS has developed this example of the GFE notice:
The expected costs that inform the GFE should be provided by all physicians and facilities who are reasonably expected to furnish the items or services that would be billed to the uninsured (or self-pay) individual. In 2022, patients can request those from any co-providers or co-facilities, and those providers are expected to give GFE’s. Beginning in 2023, “convening” providers and facilities will be responsible for gathering all costs for the GFE.
Terms to Know
- Convening Provider or Facility: "The provider or facility who receives the initial request for a good faith estimate from an uninsured (or self-pay) individual and who is or, in the case of a request, would be responsible for scheduling the primary item or service."
- Co-Provider or Co-Facility: "A provider or facility other than a convening provider or a convening facility that furnishes items or services that are customarily provided in conjunction with a primary item or service."
When to provide a good faith estimate:
- Upon patient's request
- Upon scheduling a service
- Before services are rendered
- In cases when services are scheduled at least three business days before the service date, the good faith estimate must be provided no later than one business day after scheduling.
- In cases when services are scheduled at least 10 business days before the service date, the good faith estimate must be provided no later than three business days after scheduling.
- In an instance where a good faith estimate (preliminary) was provided upon the request of the uninsured (or self-pay) individual, upon the subsequent scheduling of the service, a new good faith estimate must be provided to the uninsured (or self-pay) individual for the now scheduled item or service.
Include the following in any good faith estimate:
- Patient's name and date of birth.
- Description of the primary item or service in clear understandable language and the date of service.
- Itemized list of items or services grouped by each provider or facility that are expected to be provided and the estimated charges.
- Estimate of expected charges being provided in conjunction with the scheduled service or item by another healthcare provider or healthcare facility.
- Applicable diagnosis codes.
- Name, NPI and TIN of each provider or facility represented in the good faith estimate, and the state and office or facility location where the item or service are expected to be provided.
Method for sharing a good faith estimate:
- Must be provided to the patient in writing and orally
- Estimates must be in accessible formats
- Must be available in the language spoken by the individual
Patient-Provider Dispute Resolution
In a situation where an uninsured (or self-pay) individual receives a good faith estimate and then is billed for an amount substantially in excess of the good faith estimate, a patient-provider dispute resolution process is available to determine an appropiate payment amount.
A patient's bill will be determined eligible for the patient-provider dispute resolution process if:
- The patient received a good faith estimate
- The process is initiated within 120 calendar days of the patient receiving the bill
- The bill is in excess of the good faith estimate by at least $400 for any provider or facility listed.
The participating individual will be expected to submit their request via an on-line portal and will be charged an administrative fee.
- To ensure the administrative fee does not act as a barrier for consumers accessing dispute resolution, the fee will be set at $25 in the first year and will be updated through sub-regulatory guidance in future years.
Once the provider/facility receives notice, they must not move bills into collections (or threaten to move bills into collections) for the disputed items or services as well as suspend accrual of late fees on unpaid bill amounts until the PPDR process has concluded.
- However, once this process has started, the parties can still negotiate a settlement amount. When necessary, the Select Dispute Resolution (SDR) entities will make payment determinations as part of the patient-provider dispute resolution process.