The No Surprises Act passed at the end of last year as part of the Biden administration’s omnibus spending bill. According to the act, in almost all situations where there are surprise out-of-network bills (starting January 1st, 2022), providers will not be able to bill patients for more than the in-network cost sharing due under their insurance.
The goal of this legislation was to put space between patients and the negotiations of their payors and providers, as well as protecting them from unexpected medical costs. Since the bill’s passage, various regulatory agencies have been hard at work preparing regulations regarding the law’s implementation — regulations that will make clear the law’s impact on the markets and how providers will shift their practices given the law’s substance.
Earlier this month, the first Interim Final Rule was released. This rule focused mainly on the initial Qualifying Payment Amount (QPA). The QPA is very important to the whole process, as it is the amount that will be used to determine the patient cost sharing amount. The QPA is also one factor used by an arbiter if a payor or provider should pursue an Independent Dispute Resolution process to determine a fair amount of payment for a performed service.
Under the new law, QPA is calculated based on “same or similar item or service,” which are billed under the same service code, depending on the system of coding used. The question that results from this is, if a provider submits a CPT on a claim, is the QPA based on that CPT, or can it be based on a different CPT for a “same or similar item or service”? E.g. could a payor submit the QPA based on a service level lower than what the claim originally described?
Continuing with QPAs, should a provider wish to negotiate in the 30 days following a claim, they may do so with the contact information provided on the QPA. That said, there is no mandatory information given with the QPA regarding insurance product type, patient responsibility, or the QPA itself was calculated. This could present problems when it comes to negotiation.
Finally, a ‘clean claim’ must be submitted by a provider in order to begin the 30 day timeline for negotiation. The important question that follows is, what constitutes a clean claim? Are payors able to continue asking for information — for example, medical records and substantiation of CPT assignment — before the 30 days officially starts?
This legislation also reinforces the prudent layperson (PLP) standard. The new rule describes that payors must determine if the PLP standard was met on a case by case basis, thus disallowing denial of claims without this in-depth evaluation of the circumstances of the care being sought.
Regarding state-by-state legislation, each state law that determines a recognized amount or out-of-network rate must apply to three different groups, otherwise it cannot apply. First, it must apply to the plan involved, with space made for plans to opt-in if they are not otherwise under the jurisdiction of the state law. Second, it must apply to the nonparticipating provider or nonparticipating emergency facility involved. Finally, it must also apply to the involved service. If any of these criteria are not met, the state law does not apply to determining the recognized amount or out-of-network rate. ERISA plans can also opt in to state law processes.
With all of this noted, there are still substantial questions that remain, mostly regarding how the No Surprises Act’s quick timeline can be kept without massive delays from downcode disputes or payors’ questions of medical necessity.
We hope that answers to these questions will emerge as we approach the January 1st, 2022 date of enactment. Until then, we will keep you updated with all current information.