The 2022 Evolution of the No Surprises Act

Athira Sivan
Published

The No Surprises Act (“NSA”) is a federal law that went into effect January 1, 2022. The NSA statute was enacted as part of the Consolidated Appropriations Act, 2021 and has been implemented by three interim rules jointly announced by the Office of Personnel Management within the Department of the Treasury, the Department of Labor, and the Department of Health and Human Services in 2021 [1]. The primary purpose of the NSA is to eliminate surprise medical bills for individuals enrolled in group health plans or group or individual health insurance coverage offered by a health insurance issuer. The NSA prohibits surprise bills in situations where services are provided by out-of-network facilities in emergency situations, for services provided when a patient is treated by an out-of-network provider at an in-network facility, and for balance bills issued by out-of-network air ambulances by limiting the amount for which patients can be billed.



What You Need to Know:

  • The primary purpose of the NSA is to eliminate surprise medical bills for individuals enrolled in group health plans or group or individual health insurance coverage offered by a health insurance issuer.
  • The NSA prohibits surprise bills in situations where services are provided by out-of-network facilities in emergency situations, for services provided when a patient is treated by an out-of-network provider at an in-network facility, and for balance bills issued by out-of-network air ambulances by limiting the amount for which patients can be billed.

Portions of the NSA have since been vacated due to legal challenges. The Centers for Medicare & Medicaid Services (“CMS”) has published supplemental guidance and Frequently Asked Questions (“FAQs”) documents throughout 2022 to address these challenges. This article addresses both the legal challenges and ongoing CMS guidance and FAQs.    

Legal Challenges

In February 2022, the arbitration process established in the NSA was vacated by a Texas federal judge in Texas Med. Association v. United States Department of Health and Human Services.[2] The NSA included a directive for independent dispute resolution (“IDR”) processes to settle disputes between out-of-network providers and health insurers regarding appropriate reimbursement amounts. IDR is used when negotiations are unsuccessful and a certified federal IDR entity [3] is brought in to review the specifics of the case and the items or services received and determine a final judgment. The NSA detailed a process whereby the arbitrator decides the appropriate rate by considering various factors including how close the offer is to the qualifying payment amount (“QPA”). The judge determined that the government failed to adhere to the Administrative Procedure Act by not following the text of the NSA nor adhering to proper notice and comment requirements when it required arbitrators to select the amount closest to the median in-network rate in settling payment disputes between insurers and certain out-of-network health care providers.

In July 2022, another portion of the NSA was vacated by the same Texas federal judge in Lifenet, Inc., v. United States Department of Health and Human Services[4] This time, an interim final rule applicable to air ambulance service providers was vacated. The judge applied the same reasoning in Texas Med. in finding the provision to be unlawful, stating that the provision created a QPA presumption by requiring the arbitrator to select the QPA unless credible information clearly demonstrated that it was materially different from that of an appropriate out-of-network rate.

CMS Guidance

Legal challenges to the NSA aside, there were multiple helpful guidance documents published by CMS to clarify provisions within the NSA. Generally, guidance from CMS is an informal summary of legal standards – it is not a statute, regulation or formal policy. Its purpose is to answer questions and provide more information to better allow providers to abide by the NSA. In February 2022, CMS issued FAQs [5] answering almost 50 questions on independent dispute resolution under the NSA along with a chart [6] to help determine whether the federal IDR process, state law or the All-Payer Model Agreement applies for determining out-of-network rates.

In April 2022, CMS issued more FAQs. A two-part FAQ [7] focused on good faith estimates (“GFEs”) that providers must provide to uninsured and self-pay patients. This FAQ included responses to what encompasses a GFE, when a GFE needs to be provided, and other requirements for a GFE. The second part of this two-part FAQ detailed provider NSA compliance guidance, addressing topics such as who is exempted from and who falls under NSA requirements, signature requirements, and IDR fees.

In June 2022, in response to ongoing confusion by providers regarding applicability of the NSA and notice and consent requirements to patients, CMS issued more FAQs [8] clarifying which providers must comply with the NSA rules, answering questions regarding providing notice to a patient, and obtaining the patient’s consent to waive balance billing and cost-sharing protections.

In August 2022, in addition to CMS issuing additional FAQs [9] intended to clarify the application of NSA billing provisions, the Office of Personnel Management, Department of the Treasury, Department of Labor and Department of Health and Human Services jointly issued a rule finalizing certain interim rules from 2021 and further clarifying the IDR process for providers and health insurance issuers. The final rule (“Final Rule”) [10] accounted for the portions of the NSA vacated by the legal decisions and amended the provisions related to consideration of information when a certified IDR entity makes a payment determination. The Final Rule includes requirements regarding IDR entities’ explanations of determinations and underlying rationale; including the factors an IDR entity should consider when making a payment determination and the requirements for a written decision. The Final Rule instructs the IDR entity to select the offer that the IDR entity determines best represents the value of the item or service at issue. The Final Rule also addresses the requirements for disclosures by plans and issuers regarding QPA.  The terms of the Final Rule went into effect October 25, 2022.

In September 2022, a request for information to inform rulemaking on the requirements related to the advanced explanation of benefits and GFE for covered individuals was issued [11]. Saul Ewing attorneys will track any rules promulgated as a result of the request for information and will publish an update as appropriate.

Saul Ewing attorneys regularly counsel providers and health care professionals with respect to regulatory compliance issues, including the NSA. For more information relating to the firm’s health care group or the NSA, please contact the authors or the firm's attorney with whom you are regularly in contact.

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[1] Interim rules part 1, 2 and 3 can be found at:

https://www.federalregister.gov/documents/2021/07/13/2021-14379/requirements-related-to-surprise-billing-part-i

https://www.federalregister.gov/documents/2021/10/07/2021-21441/requirements-related-to-surprise-billing-part-ii

https://www.federalregister.gov/documents/2021/11/23/2021-25183/prescription-drug-and-health-care-spending

[2] E.D. Tex., No. 6.21-cv-425 (Feb. 23, 2022).

[3] A list of Federal Certified IDR entities can be found here

[4] E.D. Tex., No. 6:22-cv-162 (July 26, 2022).

[5] https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Guidance-FAQs-Federal-Independent-Dispute-Reolution-Process.pdf

[6] https://www.cms.gov/files/document/caa-federal-idr-applicability-chart.pdf

[7] https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Guidance-Good-Faith-Estimates-FAQ.pdf

[8] https://www.cms.gov/files/document/cciio-nsa-faqs.pdf

[9] https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-55.pdf

[10] https://www.federalregister.gov/documents/2022/08/26/2022-18202/requirements-related-to-surprise-billing

[11] https://www.federalregister.gov/documents/2022/09/16/2022-19798/request-for-information-advanced-explanation-of-benefits-and-good-faith-estimate-for-covered
Author
Athira Sivan
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