No Surprises Act “Part 1” Regulation Issued

man looks at a bill with a worried face

August 19, 2021

Randi A Brantner, MBA-HA
Vice President of Analytics
PARA HealthCare Analytics, an HFRI Company

Background: Federal law is required to prevent “surprise” billing

In 2020, Congress held meetings to determine whether laws should be enacted to prevent the devastating financial obligations imposed on a patient with healthcare insurance who is treated by an out-of-network provider, particularly when the patient did not know or expect that insurance coverage would be limited for that care.

During Congressional hearings, citizens recounted unexpected, and devastating, financial obligations incurred by patients who were transported by out-of-network air ambulance services. According to the Nebraska Department of Insurance, the average air ambulance trip is 52 miles and costs between $12,000 to $25,000 per flight. Since most air ambulance services do not participate as “network” providers with insurers, that portion of the bill that the insurer will not cover becomes a patient liability. The plight of these patients and others convinced Congress that federal law should prevent a “surprise” bill resulting from an uninformed patient owing large sums of money to an out-of-network provider.

“No Surprises Act” is added to the Consolidated Appropriations Act of 2021

The resulting legislation, the “No Surprises Act”, was incorporated into the Consolidated Appropriations Act of 2021, which was signed into law by then-President Trump in late December 2020. The new Federal law limits the ability of both insurers and out-of-network providers to shift a significant financial obligation to the patient/beneficiary, unless that patient is provided with advance written notice of the anticipated amount that the patient will owe, along with information about the patient’s alternatives to out-of-network care. If there is a State law that addresses the same concern, State law takes precedence.

Interim Final Rule recently released

The new law becomes effective on January 1, 2022, and the Office of Personnel Management, along with the Department of Health and Human Services, Labor, and Treasury developed implementing regulations. The first regulations, dubbed “Part 1”, were released on July 1, 2021 in an “Interim Final Rule with Comment Period” (CMS-9909-IFC.)
Stakeholders should pay particular attention to provider obligations arising from the law, including:

  • Distributing standard information about patient rights under the No Surprises Act
    Information must be posted on the provider website, in signage in public areas of the facility, and in a written one-page, double-sided document distributed to insured patients prior to collecting payment from the patient or submitting a claim to the patient’s group health insurer. (A model notice is under development.)
  • The “Notice and Consent” requirements of No Surprises Act
    Out-of-network providers and facilities must obtain the patient’s informed consent to collect out-of-network costs from the patient. The notice requirements include an estimate of the costs the patient will be liable to pay and information about in-network service alternatives. Notices must be available in the 15 most common languages spoken in the provider’s region. (It is not clear whether a provider may simply opt-out of the notice requirement and accept whatever the insurer’s discounted payment rate may be.)
  • The method insurer must use to calculate the “Qualifying Payment Amount” for out-of-network services
    The payment the insurer is obligated to use in calculating provider reimbursement and patient liability for services at an out-of-network provider could be based on that insurer’s median
    in-network contracted rates with other like providers within the same region, depending on specific circumstances

The second set of implementing regulations, “Part 2”, are expected to be published in coming months relating to dispute resolution and other provisions of the new law.

Additional Resources

To learn more about the No Surprises Act and the regulations implementing the new law, visit the following websites:

  • Interim Final Rule, CMS-9909-IFC, published on7-13-21 in the Federal Register
    • Subpart E – Health Care Provider, Health Care Facility, and Air Ambulance Service Provider Requirements
      • 149.410 Balance billing in cases of emergency services.
      • 149.420 Balance billing in cases of non-emergency services performed by nonparticipating providers at certain participating health care facilities.
      • 149.430 Provider and facility disclosure requirements regarding patient protections against balance billing.
      • 149.440 Balance billing in cases of air ambulance services.
      • 149.450 Complaints process for balance billing regarding providers and facilities.
  • CMS: “Fact Sheet” on the interim final rule
  • The American Hospital Association: concise summary and analysis
  • The American Medical Association: high-level summary
  • United Healthcare: convenient FAQ-style resource on its website
  • No Surprises Campaign (People against Unfair Medical Bills): consumer stories and letters from diverse interests participating in the development of the No Surprises Act

PARA Healthcare Analytics can help

An essential component of the “No Surprises Act” is the ability for the provider to deliver pricing transparency to the consumer. Meeting the challenges of pricing transparency demands a systematic approach grounded in empirical evidence and a capable staff implementing proven solutions. PARA, a division of HFRI, a leader in accounts receivable recovery and resolution, can help you execute all steps necessary to comply with the transparency rule and improve patient satisfaction. To see how this solution would work for your hospital, click here to view a short demo.

Contact us today to learn more about how we can help your organization prepare for the pricing transparency requirement that is a critical component of the “No Surprises Act”.

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