Last December, Congress passed the No Surprises Act to protect consumers against surprise medical bills starting with plan years that begin on or after January 1, 2022. The Act, which was part of the Consolidated Appropriations Act of 2021, affects all group health insurance plans no matter how they are funded. This new regulation will go into effect nationwide on January 1, 2022.  

To help implement the new surprise medical billing provisions, the Biden Administration released an interim final rule. With respect to fully insured groups, it will be the carrier’s responsibility to make sure they are complying with the new requirements. Some key things to know about the interim final rule include:

  • The federal balance billing protections apply to emergency care at out-of-network facilities, air ambulance transport, and certain kinds of out-of-network treatments and providers if the point of care is an in-network hospital or facility.
  • Beneficiaries must pay the in-network rate for the care and services covered by the law. Cost-sharing cannot be higher than if an in-network doctor provided such services, and any coinsurance or deductible must reflect in-network provider rates.
  • In some cases, existing state laws on balance billing may be preempted by the federal requirements. In others, the state laws might stand or partially stand.
    • Self-funded and level-funded plans are not subject to state balance billing laws. However, the regulation allows self-funded plans to opt-in to applicable state-level protections voluntarily.
  • The law includes some compliance responsibilities for employers that offer group health insurance coverage. Groups are required to explain the surprise billing protections to plan participants by (1) making the notice publicly available, (2) posting it on a public website of the plan or issuer, and (3) including it on each explanation of benefits. The rule includes a template notice and clarifies that good faith compliance relief applies if you use it. Carriers will most likely take care of the notification for fully insured groups, but self-funded and level-funded groups will need to take responsibility for compliance.
  • The regulation makes significant changes to what will be considered covered emergency care moving forward. Previously, if a person went to an out-of-network emergency room to qualify for in-network cost-sharing, the precipitating medical event would have to meet the "prudent layperson" definition of an emergency. Carriers and third-party administrators then paid claims and applied cost-sharing based on the provider's billing code and if it was for an "emergency" condition. Now they will need to evaluate each case on a "facts and circumstances" basis. Put another way, if a person seeks any care in an out-of-network emergency room, it's almost sure to be covered. 
  • Emergency care will include not just the initial evaluation and emergency treatment but also post-stabilization care. Emergency rooms can be both in a hospital and free-standing, including an urgent care center licensed to provide emergent care. Also, the only way a health insurance carrier or self-funded plan can limit emergency care based on plan terms or conditions is to coordinate benefits.  Restrictions like waiting periods and general plan exclusions cannot apply.
  • These changes to emergency care may mean that carriers and employer plans need to update the terms of their plan documents.
  • If a plan gets a bill from an out-of-network provider governed by the surprise billing law, they have 30 days to either send an initial minimum payment amount or deny the claim.  If a provider does not accept payment, the parties have 30 days to resolve the matter privately. 
    • If the parties do not resolve the billing issue within 30 days, the plan must make a payment to the provider and base any cost-sharing on: (1) an amount determined by an applicable state All-Payer Model Agreement; (2) if there is no applicable All-Payer Model Agreement, an amount specified by state law; (3) if there is no All-Payer Model Agreement or prevailing state law, then the lesser of the billed charge or the plan's or issuer's median contracted rate.  If the provider does not accept payment based on those methodologies, they could trigger the independent dispute resolution process.
  • Since self-funded and level-funded plans are not subject to state laws, they do not have to use a state All-Payer Model Agreement or the state law's defined payment amount unless they voluntarily choose to do so. If self-funded and level-funded plans do not opt-in to either of these methods, they can simply calculate the in-network amount based on the lesser of the billed charges or the qualified payment amount.

This regulation is only the first of several that will be released soon to execute the new protections.  More rules will follow soon on how the arbitration process and air ambulance cost assessments will work.