On December 28, 2020, the President signed into law the omnibus Consolidated Appropriations Act, 2021 (the Act). Included in the Act is the No Surprises Act (the NSA), an amendment to the Public Health Services Act (42 U.S.C. 300gg et seq). The NSA is a first of its kind Federal act ending patient and beneficiary responsibility for out-of-network surprise bills. The NSA is a compromise bill that represents the culmination of two-plus years of effort to remove the burdens previously shouldered by patients that result from surprise medical billing.
What is “Surprise” Billing?
The NSA defines a surprise billing benefit or service as emergency benefits or services typically provided or covered by an insurer, but that falls out-of-network in the specific instance; emergency benefits and services retain their standard definitions under section 1867 of the Social Security Act. Surprise billing benefits and services usually arise when an out-of-network provider is unexpectedly involved in a patient’s care. This usually happens with an emergency where a patient is not able to pre-select their provider. The most common examples are emergency room physicians, anesthesiologists, and ground/air ambulances. Crucially, the NSA ensures that patients will no longer be responsible for bills from out-of-network physicians, specialists, air ambulances, or other clinicians whether or not: (a) there was a need for a prior authorization determination or (b) the furnishing provider is a participating provider with respect to the service(s) rendered. However, out-of-network ground ambulance services are specifically excluded from the NSA.
After the NSA goes into effect in 2022, the responsibility for surprise bill payments shifts to providers and insurers. The NSA requires these parties to either negotiate most billing disputes or enter a binding independent dispute resolution (IDR) process that adjudicates the out-of-network rate and financial responsibility between the provider and insurer. By Summer 2021, HHS will draft a final rulemaking process to regulate the exact negotiation and IDR processes, including determination of IDR provider eligibility.
To date, the NSA lays out some specifics of the price-setting, negotiation, and mediation of out-of-network rates and payments. If the provider and insurer cannot agree upon a rate for the out-of-network service(s) rendered, then the parties must submit information and arguments to a mediator to adjudicate the dispute. The final NSA forbids the IDR arbitrator from taking into account applicable Medicare and Medicaid rates for the service(s) rendered. As a counterweight to this ban, Congress also included language in the NSA that forbids the IDR arbitrator from considering providers’ billed charges.
The NSA allows for certain disputed services and benefits to be jointly considered as part of a single provider/insurer IDR adjudication. The Act instructs the HHS Secretary to specify criteria under which “multiple qualified IDR dispute items and services” will be jointly considered. However, the NSA does outline a few major requirements, such as: (a) homogeneity of parties across disputes; (b) all benefits and services are related to the treatment of a similar condition; and (c) provision of all benefits and services within a single 30-day period. Likewise, the NSA also allows for the joint adjudication of benefits and services which are included by a provider or facility as part of a bundled payment, and instructs the HHS Secretary to establish regulations governing the same.
Effect on Georgia’s Surprise Billing Consumer Protection Act
Georgia’s own surprise billing bill went into effect on January 1, 2021 (read more on Georgia’s bill here). The NSA specifically addresses potential overlap between itself and existing state laws. Where a state law and/or regulation exists and promulgates a prohibition on patient responsibility for surprise bills such state law supersedes the NSA. There is limiting language in the NSA requiring such state law to be explicitly applicable to ERISA plans and coverages, otherwise the NSA will control with respect to benefits or services rendered under an ERISA plan. Therefore, all providers and insurers subject to Georgia’s Surprise Billing Consumer Protection Act should continue to operate pursuant to the state act until further guidance and regulatory schemes are promulgated for the NSA, which is expected to occur in Summer 2021 and be followed by an effective date in the beginning of 2022.
If you have any questions about this legal update, please contact a member of the MMM healthcare group.