This is our final “Blog Days of Summer 2022” post; we hope you’ve learned a bit more about benefits welfare plan compliance as you’ve soaked in the sunshine (while trying to stay cool and hydrated)! We thank you and wish you the best for a productive, peaceful autumn. ~The ComplianceDashboard Team
The Departments of Health and Human Services, Labor, and Treasury (the Departments) have issued a final rule and sub regulatory guidance in the form of FAQs regarding the implementation of the No Surprises Act (NSA).
Recall that under the NSA, plan participants are protected from surprise medical bills when they go to an in-network facility for emergency and certain other treatments, yet receive services (and bills for those services) from out-of-network providers. The NSA also protects plan participants who receive emergency air ambulance services.
Under the NSA, participants only have to pay their normal cost-sharing amounts for the affected services; they will not be balance billed for the non-network provider’s services. It is up to the providers and the plans to negotiate the plan’s ultimate payment amount. If those parties are unable to reach a negotiated settlement, either party may initiate an independent dispute resolution (IDR) process conducted by a certified IDR entity.
The IDR Process: Bullets Please!
- Under an interim final rule (IFR) released in 2021, the IDR entity’s decision turned critically on the plan’s qualifying payment amount (QPA).
- The QPA is the median of the plan’s contracted rates for the item or service in the geographic region where the services were rendered.
- The effect of the IFR was to create a presumption in favor of the QPA (which providers would then have to overcome). Perhaps more to the point, it also tended to result in lower fee awards to providers.
- Many providers felt that this presumption was not justified by the language of the NSA and they challenged the IFR court.
- The court agreed with the providers.
- The result is the new final rule which includes the QPA as a factor in the IDR entity’s determination, but eliminates the presumption that the QPA is the correct standard.
The Final Rule
The rule and guidance offer detail (a lot of it) regarding the application of the NSA and mechanics of the IDR process. Most employers with self-insured plans will leave the understanding and implementation of those details to the TPAs that handle their claims. There are, however, are few items embedded within those documents that employers should attend to.
Plans to Pay More.
The shift in focus away from the QPA is predicted to result in higher amounts being paid to providers. Put bluntly, your plan will end up paying more under the new rules. If that creates budgetary or plan design concerns, this would be good time to discuss them with your TPA, broker, and other consultants.
The new rules require plans to disclose whether they applied “downcoding” when calculating the QPA. Downcoding is the practice of assigning a treatment code to a given service different from the one given by the provider when the service is billed. Downcoding generally results in a lower QPA. With this disclosure, providers will be able to argue that the downcoding was inappropriate (which may also result in the plan paying more for a service). Employers should confer with their TPAs to determine whether they employ this practice; if so, assess the budgetary impact on the plan.
The FAQs Part 55 provides additional guidance regarding the scope of the NSA.
- They establish that the NSA applies to emergency services and air ambulances even if a plan does not use provider networks, but rather relies on other pricing standards such as reference-based pricing. However, it does not apply to non-emergency services for plans that do not use provider networks. It also applies to a plan that normally covers only in-network services since the NSA requires even those plans to cover non-network services in situations within the purview of the NSA.
- They clarify that the NSA governs air ambulance services when the point of pick-up is outside the USA.
- They reiterate that a behavioral health crisis can qualify as an emergency under the NSA, and the law applies to both hospital emergency departments and independent freestanding facilities. Note: the latter falls within the scope of the statute if it legally provides emergency services, regardless of what it is called or how it is characterized on its license.
“Public” Website Issue Resolved.
The statute requires plans to make disclosures about balance billing protections to plan participants by posting them on a public website of the plan. This caused confusion for many employers because their plans did not have a public website. The FAQs establish that if a plan does not have a website, the plan may satisfy the posting by entering into a written agreement under which a plan’s health insurance issuer or TPA, as applicable, posts the information on its public website where information is normally made available (on the plan’s behalf) to participants, beneficiaries, and enrollees. This guidance applies in instances in which the employer may maintain a public website, but the group health plan sponsored by the employer does not.
There is a catch, however; if a plan enters into such a written agreement and the health insurance issuer or TPA fails to make the required disclosures, the plan violates the disclosure requirements.
What are employer take-aways about this requirement?
- The employer/plan must secure a written agreement from its health insurer or TPA, including appropriate indemnification provisions; and
- The employer/plan must monitor the performance its insurer or TPA.
Last but not Least.
The FAQs also addresses the question of how a self-insured plan that uses multiple benefit packages administered by two or more TPAs should calculate the QPA. In these cases, the plan may allow each TPA acting on behalf of the plan to calculate a median contracted rate separately for those benefit package options administered by the TPA. Absent this clarification, an employer may have own the unenviable task of enforcing the requirement of TPAs to coordinate on the calculation of the appropriate QPA.