Big surprises in the No Surprises Act


In one of the biggest attempts by the federal government to combat surprise medical billing, Congress in late 2020 passed the No Surprises Act (NSA), which imposes a host of new transparency and coverage requirements for employer-sponsored group health plans. Many of the most significant coverage changes were required to be implemented on Jan. 1, 2022, for most plans.

There are two main surprise billing situations the NSA regulates. With the first, a participant visits an in-network facility, but one of the treating providers, such as the anesthesiologist, is out-of-network. After the NSA, participants are responsible only for in-network cost-sharing amounts (copay, co-insurance) to the out-of-network provider, and payments count toward the in-network deductible. An exception exists for certain “non-ancillary services” in which, only after the participant receives notice of, and consents to, the out-of-network price, he or she may receive a balance bill.

Second, although not a completely new requirement, group health plans must impose in-network cost-sharing when participants visit an out-of-network emergency room for emergency services. While this has been the rule for emergency rooms connected to a hospital since the Affordable Care Act, the NSA expands these requirements to independent, free-standing emergency rooms if licensed as such by the state.

When in-network cost-sharing rates are required for an out-of-network provider, cost-sharing is typically based on the “qualifying payment amount” (QPA) and not the actual billed amount. The QPA is a complex formula — essentially the average in-network rate for the plan or its third-party administrator.

However, the QPA only determines how much the participant must pay. For the plan’s share of the bill, the NSA imposes a new, mandatory independent dispute resolution (IDR) process. If the provider and plan cannot agree on a price for the service through voluntary negotiations, either party may initiate the IDR process. A government-approved IDR entity arbitrates the dispute. Both parties submit evidence and a price that each believes to be the appropriate payment. The IDR entity is then required to choose one of the payment proposals — typically the one closest to the QPA.

Takeaway: Employers should work with their health plan service providers to ensure these requirements have been timely implemented operationally, and that the plan document will be amended accordingly.

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