As the implementation of the No Surprises Act and its relevant Interim Rules loom over the industry, questions linger about the specifics of the law. Now, as the second Interim Final Rule has been released to the public, some of these questions have been answered while other parts of the Final Rule only bring about more queries. In this piece, we’re going to summarize the timeline of the No Surprises Act to date including the following first Interim Rule before breaking down the troubling new second Interim Final Rule released on September 30th.
At its core, the No Surprises Act sought to eliminate the “surprise bill” — the balance bill received by patients after they’ve been treated by an out-of-network physician. As emergency situations will frequently put patients into a position where they seek the nearest physician and not necessarily the nearest physician in their network, this law is designed to protect patients from large and unexpected surprise bills. Starting on January 1st, 2022, in most situations where there are surprise out-of-network bills, providers will be unable to bill patients for more than the in-network cost-sharing due under their insurance.
The initial release of this law had many providers wondering exactly how this legislation was intended to be implemented, especially given its quick timeline. To answer these questions, an Interim Final Rule was released in mid-July of this year.
The Rule stated, among other things, that patients would pay a cost-sharing rate similar to those levied in-network for emergency and certain non-emergency services furnished by out-of-network providers. This rate would be calculated based on a qualifying payment (QPA) amount specific to the local area, unless a state All-Payer Model Agreement or relevant state law applies. This rule also laid out how QPA would be calculated, how and when a provider can negotiate a claim, reinforced the prudent layperson (PLP) standard, and more.
As many issues remained, a second Interim Final Rule was recently released. Rather than answer lingering issues, this second Interim Final Rule seems to uproot the core legislative intent of the No Surprises Act — putting the most vulnerable patients at financial risk and negatively impacting provider groups in in-network contract negotiations.
For context, early versions of the No Surprises Act tied out-of-network reimbursement to a plan’s in-network rate, a provision that was changed so the bill could garner enough Congressional support to pass. The new provision then allowed arbiters to consider a list of factors, not just in-network rates, which they could consider when determining rates.
The September 30th ruling changes this. Instead, arbiters in an independent dispute resolution process are told to simply ignore these lists in favor of merely choosing the payment amount closest to the plan’s QPA in most cases.
This new ruling gives considerable weight to the QPA, which may spell bad news for both patients and provider groups. As the QPA is an imprecise measure, it poorly reflects proper costs. Furthermore, the QPA will be accepted as the correct starting point for the independent dispute resolution process unless the parties involved can submit sufficient evidence to demonstrate the QPA is substantially different from the relevant out-of-network rate. As a result, this new ruling could give insurers leeway to manipulate fair payment standards needed for sufficient emergency physician coverage.
To summarize, Congress specifically drafted the law to ensure none of the criteria used in these resolutions were to be given undue weight relative to the others. This new ruling is an express reversal of this idea.
Apart from this issue, the new ruling also makes a few separate points. It lays out how and when uninsured people will be informed of potential costs of a future procedure. It expands the circumstances under which individuals can dispute payment denials. Finally, it requires certified IDR entities to issue monthly reports in order to inform quarterly public reports about payment determinations.
This new ruling seems in conflict with what we previously understood to be the goals of the No Surprises Act. While it is possible that this may be reversed in the coming months, additional pressure must be applied to legislators to ensure the needs of patients and provider groups. As always, we will keep you informed as this develops.