In the first rule, Part I of the no surprise billing requirements, health plans were required to implement protections against balance billing and out-of-network cost sharing for emergency services, non-emergency services rendered by non-participating providers at specific facilities, and air-ambulance services by non-participating providers.  This rule, Part II, does not change that but offers clarification on the independent dispute resolution process, good faith estimates for uninsured (or self-pay) individuals, and expanded rights to external review.

As we stated in our August 13, 2021 blog, “No Surprises Act Interim Final Rule: Understanding the Implications,” health plans and insurers are required to disclose information on items and services covered by the No Surprises Act as follows:

  • Publicly available, posted on the insurer/plan’s public website, and included on advanced explanation of benefits (A-EOB)
  • Requirements and prohibitions applicable under sections 2799B-1 and 2799B-2 of the Public Health Service Act (PHSA)
  • Include applicable state requirements for out-of-network balance billing
  • Provide instructions for how to contact appropriate state and federal agencies if the individual believes the provider or facility has violated the requirements described in the notice

A key step for payers to consider is assessing implementation readiness of current state for internal and delegated processes and technology.  All relevant processes, technology, and documentation such as websites, policies, internal standard operating procedures, provider and member portals, member rights and responsibilities, provider manuals, training guides, contracts, summary of benefits and coverage documents, call center scripts, internal training manuals and broker resources should be reviewed to help avoid readiness gaps.

Independent Dispute Resolution (IDR) Process

Members of Congress reacted to the Department of Health and Human Services (HHS) interim final rule (IFR) filed on September 30, 2021 entitled “Requirements Related to Surprise Billing; Part II”.   In a November 5, 2021 letter to the HHS Secretary, Xavier Becerra, the members urged HHS to amend the IFR to reflect the Independent Dispute Resolution (IDR) process as it was specified in the No Surprises Act that Congress passed in December 2020.

The IFR as written does not reflect the balanced process for settling payment disputes, rather, it makes the median in-network rate the default factor considered in the IDR process.  This approach is contrary to the statute as the IDR process should consider all the factors outlined in the statute without disproportionately weighting one factor.  It does not seem that there will be any near-time changes coming with the No Surprises Act and organizations need to be ready by January 1, 2020.

Implications to the IDR Process if Revised

As stated by the Congressman in the letter to HHS:  The No Surprises Act specified an IDR process that allows providers and payers to bring any relevant information to support their payment offers for consideration, except for billed charges and public payer information.  This includes:

  • Median in-network rates
  • Provider training and quality of outcomes
  • Market share of parties
  • Patient acuity or complexity of services
  • In the case that a provider is a facility: teaching status, case mix, and scope of services
  • Demonstrations of previous good faith efforts to negotiate in-network rates
  • Prior contract history between the two parties over the previous four years

Median in-network rates is only one consideration, not the default.  The certified IDR entity is to consider each of the above factors if they are submitted and not any single piece of information to be a default consideration.

Background on the No Surprise Billing Rules

The government has to date filed three rules to implement provisions in the No Surprises Act (Division BB, Title 1 of the Consolidated Appropriations Act, 2021).

The rules are about protecting consumers from excessive out-of-pocket costs resulting from surprise billing and balance billing.  Beginning January 1, 2022, the rules ban surprise billing for emergency services and certain non-emergency care provided by out-of-network (OON) providers at in-network facilities, and limit high out of network cost-sharing for emergency and non-emergency services for patients.  They will ensure uninsured and self-pay consumers know how much health care will cost before getting care; and that providers, health plans, and health insurance issuers have a process to settle payment disputes.

Requirements Related to Surprise Billing; Part II

Following is a description of the four main provisions covered in the third rule, IFR Part II:  the independent dispute resolution (IDR) process, good faith estimates for uninsured (or self-pay) individuals, the patient-provider dispute resolution process, and expanded rights to external review.

Independent Dispute Resolution

The Requirements Related to Surprise Billing, Part II, establishes a federal independent dispute resolution process that will be used by out-of-network providers, facilities, air ambulance services, group and individual market plans and issuers if there is an unsuccessful open negotiation.  This process will apply only for services where balance billing is prohibited under Part I of the Rule.

The independent dispute resolution process in Part II provides for a 30 day “open negotiation” for those in dispute to determine a payment rate.  Either party may initiate the independent dispute resolution process during the 4-business-day period beginning on the 31st business day after the start of the open negotiation period.  The parties may also jointly select a certified independent dispute resolution entity to resolve the dispute.  If a certified independent dispute resolution entity cannot be agreed upon, the Departments (the Department of Health and Human Services [HHS], the Department of Labor [DOL], and the Department of the Treasury) will make the selection.

Once a certified independent dispute resolution entity has been identified, the disputing parties will submit their payment offers and the supporting information to them.  After review of the submitted information, the certified independent dispute resolution entity will issue a binding determination by selecting one of the payment offers submitted by the disputing parties.  In 2022, each party will pay a $50.00 administrative fee for having used the independent dispute resolution process.  The non-prevailing party will be responsible for payment of the fees.

The Departments will certify independent dispute resolution entities on a rolling basis beginning January 1, 2022 with applications due by November 1, 2021.  Quarterly reporting will be required by the independent dispute resolution entities to help ensure transparency.

Important Open Negotiation and Independent Dispute Resolution Deadlines

Independent Dispute Resolution Action Timeline
Initiate 30-business-day open negotiation period 30 business days, starting on the day of initial payment or notice of denial of payment
Initiate independent dispute resolution process following failed open negotiation 4 business days, starting the business day after the open negotiation period ends
Mutual agreement on certified independent dispute resolution entity selection 3 business days after the independent dispute resolution initiation date
Departments select certified independent dispute resolution entity in the case of no conflict-free selection by parties 6 business days after the independent dispute resolution initiation date
Submit payment offers and additional information to certified independent dispute resolution entity 10 business days after the date of certified independent dispute resolution entity selection
Payment determination made 30 business days after the date of certified independent dispute resolution entity selection
Payment submitted to the applicable party 30 business days after the payment determination

Good Faith Estimates for Uninsured (or Self-pay) Individuals – Requirements for Providers and Facilities

A provider or facility must provide a good faith estimate when an item or service is scheduled or when it is requested by an uninsured or self-pay individual.  An uninsured or self-pay individual is one who:

  • Does not have benefits for an item or service under a group health plan, group or individual health insurance coverage offered by a health insurance issuer, federal health care program, or a health benefits plan under Chapter 89 of Title 5 of the United States Code.
  • Or has benefits for an item or service under a group health plan or individual or group health insurance coverage offered by a health insurance issuer but does not seek to have a claim for such item or service submitted to such plan or coverage.

The expected charges for each of the items or services that would reasonably accompany the primary item or service must be included in the good faith estimate.  For the period of January 1, 2022 through December 31, 2022, HHS will exercise enforcement discretion.  Enforcement discretion will allow time for providers and facilities to develop the necessary processes and procedures for receiving and providing information.

Patient – Provider Dispute Resolution

When an uninsured or self-pay individual is charged substantially in excess of the good faith estimate that was provided, the Patient – Provider Dispute Resolution process may be initiated within 120 calendar days of the patient receiving the bill.  Substantially in excess is defined by HHS as billed charges that are at least $400.00 more that the good faith estimate for any provider or facility included in that good faith estimate.

A Select Dispute Resolution (SDR) entity will resolve disputes through the Patient – Provider Dispute Resolution process.  The SDR entity will determine the payment as a component of the process.  An administrative fee will be charged to participating individuals.  The fee for the first year has been set at $25.00.

External Review

This rule expands the scope of adverse benefit determinations by amending the 2015 rule related to external reviews issued by the Departments.  The external review now includes the Surprise Billing and cost-sharing protections under the No Surprises Act and the related regulations.  Under this Interim Final Rule, grandfathered plans that are not subject to external review requirements will now be included for coverage decisions regarding whether a plan or issuer is compliant with the No Surprises Act billing and cost-sharing protections.

Cost and Burden Estimates

The Departments have provided estimated costs to comply with the No Surprise rulings.

In summary, the Departments estimate the total cost burden associated with these interim final rules to be $760.95 million in the first year, with $38.43 million attributable to the Federal IDR process for nonparticipating providers or nonparticipating emergency facilities or group health plans or health insurance issuers offering health insurance coverage; $4.02 million attributable to the external review process; and $706.7 million attributable to the patient-provider dispute resolution process.

The HHS has also provided additional cost information in the rule by the four areas:  independent dispute resolution (IDR) process, good faith estimates for uninsured (or self-pay) individuals, the patient-provider dispute resolution process, and expanded rights to external review.

Closing Thoughts

With the requirements taking effect beginning in January 2022, we’ll be watching for HHS’ response to the letter from Congress and potential amendments to implementation guidance for the IDR process.  Additionally, we can expect to see more rule-making requirements to implement other provisions in the No Surprises Act.

Sources

Acronyms

Advanced Explanation of Benefits (A-EOB); Centers for Medicare and Medicaid Services (CMS); emids Regulatory Review Board (eMRB); Department of Health and Human Services (HHS); Department of Labor (DOL); Employee Retirement Income Security Act of 1974 (ERISA); Independent Dispute Resolution (IDR); interim final rule (IFR); out-of-network (OON); Public Health Service Act (PHSA); Select Dispute Resolution (SDR).

About emids Regulatory Review Board (eMRB)

Collaboration of content for this blog was provided by eMRB subject matter experts, covering important regulatory program topics for our customers and partners.  Points of view and interpretation were relevant at time of authorship; however, they are subject to change over time.  For more information about these changes, contact us at engage@emids.com.