Department Issues Request for Information on the Implementation of No Surprises Act Requirements
September 27, 2022
On September 16, 2022, the Office of Personnel Management, IRS, EBSA and HHS (the agencies) released a request for information regarding the transfer of data from providers and facilities to plans, issuers and carriers; other policy approaches; and the economic impacts of implementing these requirements. The request is part of a rulemaking process for the advanced explanation of benefits (AEOB) and good faith estimate (GFE) requirements of the No Surprises Act (NSA).
Under the NSA, healthcare providers must provide a GFE of the expected charges for providing an item or service, along with the expected billing and diagnostic codes for these items or services to the plan, issuer, or carrier that covers a person seeking that item or service. The GFE must also include any items or services that the provider reasonably expects to provide in conjunction with the requested items or services, including those provided by another provider or facility. If a plan, issuer or carrier does not cover the person seeking the item or service, then the provider delivers the GFE directly to that person.
In addition, the NSA requires group health plans and health insurance issuers that receive a GFE to send to the covered person seeking an item or service an AEOB in clear and understandable language upon that person’s request. The plan or carrier must provide an AEOB to the covered individual (either electronically or by mail) no later than one business day after the plan or carrier receives the GFE. However, the plan or carrier must provide an AEOB to the covered individual within three business days after the date on which the plan, issuer or carrier receives the GFE or request if such item or service was scheduled at least 10 business days before such item or service is to be furnished. The AEOB must include the following information:
- The network status of the provider or facility.
- The contracted rate for the item or service, or if the provider or facility is not a participating provider or facility, a description of how the covered individual can obtain information on providers and facilities that are participating.
- The GFE received from the provider or facility.
- A GFE of the amount the plan or coverage is responsible for paying.
- The amount of any cost-sharing that the covered individual would be responsible for paying with respect to the GFE received from the provider or facility.
- A GFE of the amount that the covered individual has incurred towards meeting the limit of the financial responsibility (including with respect to deductibles and out-of-pocket maximums) under the plan or coverage as of the date of the AEOB.
- Disclaimers indicating whether coverage is subject to any medical management techniques (including concurrent review, prior authorization and step-therapy, or fail-first protocols).
The agencies’ request for information encompasses a wide variety of subjects, with a focus on the standard for exchanging the required data and the costs for implementing the standard. The agencies have not established regulatory standards for the exchange of GFE and AEOB data from providers and facilities to plans, issuers and carriers. The request seeks input regarding the use of a standard that supports interoperability and securely facilitates the exchange of healthcare information between systems, including the development of implementation guides and application programming interfaces that follow that standard. The agencies also want input regarding the costs of implementing a standard, such as the costs for verifying whether the person seeking the item or service is enrolled in a health plan and verifying the coverage for each item or service at issue in the GFE or AEOB. The agencies also seek information on the potential impact of implementing a regulatory standard on small, rural, or other providers, facilities, plans, issuers and carriers, and any barrier those small or rural providers, plans and carriers may encounter when implementing a standard.
Among other issues, the agencies request input regarding any privacy concerns for the transfer of PHI that would be part of the GFE and AEOB data exchanged between providers, plans and carriers. The agencies also seek input regarding whether information concerning the waiver of the NSA’s surprise billing protections (in cases where that is permitted) should be included in the AEOB or GFE and whether the plans or carriers should provide the AEOB to the provider as well as to the person seeking the item or service.
Employers, particularly those with self-insured health plans, should be aware of this request for information. The deadline to submit information to the agencies pursuant to this request is November 15, 2022.
Request for Information: Advanced Explanation of Benefits and Good Faith Estimate for Covered Individuals »
September 27, 2022
On August 15, 2022, the US Court of Appeals for the Fourth Circuit held in Roberts v. Gestamp West Virginia, LLC, that a jury must decide whether an employee’s Facebook message to his supervisor satisfied the notice requirements under the Family and Medical Leave Act (FMLA).
The employee underwent emergency surgery in 2019 and sent his supervisor a Facebook message indicating he would miss two weeks of work due to the surgery. The employee and his supervisor communicated via Facebook during his leave, including the need for additional time off. The employee successfully returned to work for four days before experiencing additional pain. The employee met with his supervisor to discuss additional time off to recover and sent additional Facebook messages indicating he was readmitted to the hospital. The supervisor did not respond to those messages and reported his absences to Human Resources. When the employee finally returned to work, he was informed his employment was terminated due to job abandonment.
For leave to be covered under the FMLA, the employee must notify the employer of the need for leave. The FMLA requires employers to have “usual and customary” absentee notice procedures. This employer’s written policies required employees to utilize a call-in line to notify of a late arrival time or an absence on the scheduled workday. If an employee misses three consecutive shifts without calling in, the policy considers it job abandonment and the employee is terminated.
In Roberts v. Gestamp West Virginia, LLC, the employee was terminated while on leave for a health issue and filed suit alleging FMLA retaliation, FMLA interference and wrongful discharge. The former employee argued he properly notified his supervisor while out on leave, and his absences should not have been considered job abandonment. A district court granted summary judgment for the company on all counts, and the former employee appealed. The Fourth Circuit affirmed the lower court’s ruling on FMLA retaliation and wrongful termination, but it vacated the judgment on FMLA interference. The Fourth Circuit concluded that although the employer had a written leave policy because the supervisor had previously accepted the informal absentee notifications through Facebook, a reasonable jury could find that these Facebook messages satisfied the employer’s “usual and customary” notice procedures under the FMLA.
This case provides an important reminder to employers that not only do they need to have written policies and procedures in place, but supervisors need to be trained in how to properly implement the policies. Allowing informal notifications may lead to an expanded “usual and customary” notice procedure. If supervisors are notified of an employee’s potential need for medical leave, it is important to engage with the Human Resources department to ensure proper procedures are followed.
Roberts v. Gestamp West Virginia, LLC »
Eleventh Circuit Narrows Injunction in Federal Contractor Vaccine Mandate Challenge
September 13, 2022
On August 26, 2022, in Georgia v. Biden, the US Court of Appeals for the Eleventh Circuit ruled the December 7, 2021, nationwide preliminary injunction issued by the US District Court for the Southern District of Georgia against President Biden’s federal contractor vaccine mandate was overly broad in its jurisdictional reach. A preliminary injunction is a court order stopping a party from continuing the challenged action before the case can be fully briefed and decided. To succeed at the preliminary injunction stage, a party must show they are likely to succeed in the lawsuit, would suffer irreparable harm without the injunction and that the injunction would not be against the public interest.
In Georgia v. Biden – one of many legal challenges to the mandate filed across the country – the district court found the plaintiffs (Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, West Virginia and a construction trade association) were likely to win on their claim that the mandate exceeded the president’s authority. The district court found several irreparable costs of complying with the contractor vaccine mandate, including lost employees and administrative resources needed to identify covered employees and track their vaccination status. Beyond costs, the district court opined that “workplace strife” and “untold economic upheaval” introduced by the mandate made the injunction firmly in the public interest. With these findings in mind, the district court ordered the federal government not to enforce the mandate while the case played out in court. As to scope, the district court determined the trade association’s broad national membership and the many federal contracts that involve those members and seven plaintiff states made nationwide applicability necessary.
On appeal, the Eleventh Circuit agreed with the district court’s preliminary injunction analysis but took exception to the scope. Specifically, the appeals court declared nationwide injunctions a “drastic form of relief” that “push against the boundaries of judicial power” by giving one district court among many across the country “an outsized role in the federal system.” Accordingly, the Eleventh Circuit revised the injunction to stop enforcement of the mandate only against the plaintiffs involved in the lawsuit — those seven states and members of the construction trade association.
While the Eleventh Circuit’s decision here narrowed the scope of the injunction previously issued in Georgia v. Biden, separate injunctions blocking enforcement of the federal contractor vaccine mandate remain in place in many states through other pending lawsuits. Ultimately, the US Supreme Court may have the final say on legality and scope. At this point, the Biden administration is not enforcing the federal vaccine mandate. But federal contractors and subcontractors should continue to monitor the Safer Federal Workforce Task Force for any changes to this policy.
Eleventh Circuit Order on Federal Contractor Vaccine Mandate »
HHS Releases User Manual for Prescription Drug Data Reporting
September 13, 2022
On September 8, 2022, HHS released an updated user manual that explains how to use the Prescription Drug Data Collection (RxDC) module within the Health Insurance Oversight System. The RxDC module is designed for use by group health plans and health insurers to satisfy the CAA prescription drug and healthcare spending reporting requirements.
To promote greater transparency in prescription drug pricing, the CAA requires group health plans and health insurers to report detailed data about prescription drug and healthcare spending. On November 23, 2021, the DOL, IRS and HHS (the departments) issued an interim final rule that explained the specific data that must be reported; please see our December 7, 2021, summary of this guidance. The first reports (for calendar years 2020 and 2021) are due by December 27, 2022. Subsequent reports are due annually by June 1. The departments are required to compile the submitted information in publicly available biannual reports.
It is anticipated that group health plans will contract with insurers and third-party administrators to submit the required information on the plan’s behalf. Although the required data includes some plan-specific information, most of the required information can be submitted on an aggregated basis. In fact, insurers and third-party administrators are encouraged to aggregate most of the required data by state and market segment.
The user manual focuses on the technical data reporting aspects. Instructions are provided for registering an account, accessing the RxDC module, completing and uploading data files, and creating and reviewing submissions.
Group health plan sponsors should consult with their carriers, third-party administrators, pharmacy benefit managers and other vendors to ensure all the necessary prescription drug and healthcare spending data is timely and accurately reported in accordance with the interim final rule and data submission instructions.
HIOS RxDC User Manual »
August 30, 2022
On August 19, 2022, the DOL, HHS and IRS (the departments) released final rules (the final rules) related to the surprise billing requirements of the No Surprises Act (NSA) of the Consolidated Appropriations Act, 2021 (CAA). The final rules modify certain requirements under the July 2021 and October 2021 interim final rules, which implemented the NSA provisions and federal independent dispute resolution (IDR) process, respectively. (Please see our prior articles on the July 2021 and October 2021 interim final rules.) The final rules also address portions of the October 2021 interim final rules related to payment determinations under the federal IDR process that were vacated by a Texas district court earlier this year. Several highlights of the changes under the final rules are outlined below.
The NSA provisions of the CAA apply to both insured and self-funded group health plans and became effective for plan years beginning on or after January 1, 2022. Amongst other items, NSA provisions protect participants from surprise bills for certain unexpected out-of-network (OON) items and services, including emergency services, air ambulance services and OON services received at in-network facilities. Absent an applicable All-Payer Model Agreement or state surprise billing law (generally only applicable to insured plans), participant cost-sharing for covered services is based upon the lesser of the OON billed charge or qualifying payment amount (QPA), which is the median contracted rate for the item or service in the geographic region. Plans and insurers must then address the remainder of the bill with the OON healthcare provider, facility or air ambulance provider (the provider).
Under the July 2021 interim final rules, the plan or insurer must send the provider an initial payment or notice of payment denial that includes the QPA if the QPA serves as the amount upon which participant cost-sharing is based. In response to public comments and to ensure providers have the necessary information to engage in meaningful payment negotiations, the final rules require an additional disclosure if the plan or insurer has “downcoded” the provider’s billed claim. The final rules officially define the term “downcode,” which occurs when the plan or insurer changes the service code or modifier submitted by the provider for the OON item or service to another deemed more appropriate and results in a lower reimbursement. Under the final rules, if a QPA is based on a downcoded service code, the plan or insurer must provide a statement that the service code or modifier billed by the provider was downcoded, an explanation of why the claim was downcoded, including a description of which service codes or modifiers were altered, added or removed, if any, and the amount that would have been the QPA had the service code or modifier not been downcoded.
The July 2021 interim final rules also require that a plan or insurer’s initial payment or notice of denial provide contact information, including a telephone number and email address, in the event the provider wishes to initiate a 30-day open negotiation period to determine the total payment. If the provider (or the plan or insurer) chooses to initiate the open negotiation period, the October 2021 interim final rules specify that the party must use the standard notice of initiation of open negotiation issued by the departments. This notice may be sent electronically if the party sending the notice has a good faith belief that the electronic method is readily accessible to the other party, and a paper copy is provided free of charge upon request. Accordingly, the departments emphasize that a plan or insurer cannot require providers to use their own online portal to initiate the negotiation period and must accept the standard notice of initiation of open negotiation from a provider.
A party may initiate the federal IDR process within four days after the end of an unsuccessful 30-day open negotiation period. The departments note that these timeframes are measured in business days and that plans and insurers should reflect this in statements to providers. Under the October 2021 interim final rules, the certified IDR entity (i.e., the arbitrator in the IDR process) may consider various factors when determining the proper OON payment amount to resolve disputes between providers and plans or insurers. However, the rules required that the certified IDR entity select the offer closest to the QPA, unless the certified IDR entity determined that any additional credible information submitted by the parties demonstrated that the QPA was materially different from the appropriate OON rate.
The Texas district court vacated this requirement in rulings in February and July 2022 due to inconsistency with the CAA, 2021 statutory language. (See our article on the Texas court decision in the March 1, 2022, edition of Compliance Corner.) As a result, the final rules remove the provisions of the October 2021 interim final rules that the district court vacated. Instead, the final rules specify that certified IDR entities should select the offer that best represents the value of the OON item or service under dispute after considering the QPA and then all permissible additional information submitted by the parties. Such additional information may include, for example, the level of training, experience, and quality and outcomes measurements of the provider, or the complexity of providing the service to the participant. In all cases, the certified IDR entities must evaluate whether the submitted information relates to the payment amount offered by either party and whether the additional information is credible. Under the final rules, the certified IDR entity must also assess whether the information is already accounted for by the QPA or by any of the other submitted information (to avoid double-counting). The final rules include five examples that illustrate how a certified IDR entity would evaluate submitted information to determine which party’s offer best represents the value of the disputed item or service.
The final rules also modify provisions of the October 2021 interim final rules requiring certified IDR entities to explain their payment determinations and underlying rationale in a written decision submitted to the parties and the departments. The final rules require that the written decision explain the information upon which the certified IDR entity based its decision that the selected offer is the OON rate that best represents the value of the item or service. The explanation must include the weight given to the QPA and any additional credible information regarding the relevant factors. The departments believe these requirements will ensure that certified IDR entities carefully evaluate all credible information, promote transparency and help the parties better understand the outcome of a payment determination. Additionally, if the certified IDR entity relies on additional information or circumstances when selecting an offer, the final rules require that the written decision must include an explanation of why the certified IDR entity concluded the information was not already reflected in the QPA. This requirement may provide the departments with information to inform future policymaking related to the QPA methodology.
Employers that sponsor group health plans should be aware of the release of the final rules and consult with their insurer or service provider for further information. The July and October 2021 interim final rules became effective for plan years beginning on or after January 1, 2022. The final rules, which modify certain provisions of the interim final rules, are scheduled to take effect on October 25, 2022.
Final Rule »
Fact Sheet »
New FAQs Address No Surprises Act Requirements
August 30, 2022
On August 19, 2022, the DOL, HHS and IRS (the departments) released 23 FAQs that address various aspects of the surprise billing requirements under the No Surprises Act (NSA), which was part of the Consolidated Appropriations Act, 2021. The NSA provisions apply to health insurers and group health plans effective for plan years beginning on or after January 1, 2022.
The NSA provides patient protections against surprise medical bills for out-of-network (OON) emergency services, air ambulance services and certain OON nonemergency services provided at in-network (INN) facilities. The departments issued interim final rules in July 2021 to implement the NSA. Under the NSA and its implementing provisions, balance billing for covered items and services is generally prohibited and patient cost-sharing is limited. In the absence of an applicable All-Payer Model Agreement or state surprise billing law (which generally apply only to insured plans), patient cost-sharing is based on the lesser of the OON billed charge or the qualifying payment amount (QPA), which is the median contracted rate for the item or service in the geographic region.
The remainder of the OON bill must be resolved between the plan or insurer and healthcare provider or facility; the NSA establishes a new system for this purpose. Under this system, if the OON provider disagrees with the plan or insurer’s initial payment amount, the parties can engage in a 30-day open negotiation period. If the negotiations fail, either party can pursue the federal independent dispute resolution (IDR) process, in which the arbitrator selects either the amount proposed by the provider or the plan/insurer as the final OON payment amount. The departments issued interim final rules on the federal IDR process in October 2021. As modified by final rules issued on August 19, 2022, the IDR entity must consider the QPA and additional information submitted by the parties when making the final payment determination. Specific disclosure requirements are imposed upon plans, insurers and providers regarding the patient protections and payment dispute process.
Accordingly, the FAQs supplement the guidance under the prior interim final rules as modified by the recent final rules. Generally, the FAQs reinforce the other guidance and clarify the application in certain situations. Specifically, the FAQs address the NSA’s application to no-network plans, air ambulance services and behavioral health facilities. The FAQs also cover NSA disclosures, the methodology for calculating QPAs and the federal IDR process. The final few questions explain requirements under the Transparency in Coverage (TiC) final rule.
Applicability to No-Network and Closed Network Plans
The first five FAQs discuss the NSA provisions with respect to no-network plans, such as a plan that applies referenced-based pricing and pays a set amount for a covered item or service. FAQs 1 and 2 explain that the NSA would apply if the plan covered emergency services and air ambulance services because the protections are not limited to receipt of these services from in-network (INN) providers and facilities. However, the provisions that prohibit balance billing for nonemergency services received at INN facilities would never be triggered if a plan did not have a network of participating facilities. FAQ 3 notes that a no-network plan may need to use an eligible database to determine the QPA for NSA-covered items and services if there is insufficient information to calculate a median contracted rate due to the lack of participating providers. FAQ 4 explains that if a provider and no-network plan enter the federal IDR process to resolve a payment dispute for NSA-covered items and services, the final payment amount could vary from the referenced-based price. FAQ 5 describes how maximum out-of-pocket requirements apply to items and services subject to the NSA for a no-network plan.
FAQ 6 confirms that even if a plan generally does not provide OON coverage, the NSA protections for emergency services, air ambulance services and nonemergency services by OON providers at INN facilities would still apply if these services were otherwise covered under the plan.
Applicability to Air Ambulance Services
FAQs 7 – 9 address the applicability of the NSA provisions to air ambulance services. FAQ 7 clarifies that a plan is not required to cover nonemergency air ambulance services if such services are not otherwise covered under the plan terms. FAQ 8 confirms that the NSA protections apply to air ambulance services from an OON provider when the pickup point is outside of US jurisdiction. FAQ 9 acknowledges that, for purposes of calculating the QPA, the existing guidance does not provide for geographic regions outside of the US, although the departments intend to address this issue in future rulemaking. In the interim, plans are expected to use a reasonable method to determine the QPA, such as one based on the geographic region of the border point of US entry following patient pickup.
Applicability to Emergency Services Furnished in a Behavioral Health Crisis Facility
FAQ 10 clarifies that mental health conditions and substance use disorders that meet the NSA definition of an “emergency medical condition” are subject to the NSA protections. Accordingly, emergency services provided in response to a behavioral health crisis at a hospital emergency department or freestanding emergency facility are protected, regardless of whether the license issued to the facility uses the term “emergency services.”
General Disclosure for Protections Against Balance Billing
FAQs 11 and 12 address disclosure requirements regarding NSA protections. Generally, plans and insurers must make publicly available, post on a public website of the plan or insurer, and include on each explanation of benefits for a covered item or service, information regarding the NSA requirements and prohibitions, applicable state laws regarding surprise billing and the appropriate state and federal authorities for reporting potential NSA protections. The departments issued a model disclosure notice that may be used to satisfy these disclosure requirements, please see Appendix III to the FAQs and the information in the next section, “Standard Notice and Consent Form and Model Disclosure Notice Regarding Patient Protections Against Balance Billing”.
If a group health plan does not have a website, FAQ 11 explains that the plan may satisfy the public website posting requirements by entering into a written agreement under which a plan’s insurer or third-party administrator (TPA), as applicable, posts the information on its public website where information is normally made available to participants, beneficiaries and enrollees, on the plan’s behalf. The departments note this guidance applies in instances in which the plan sponsor may maintain a public website, but the group health plan sponsored by the employer does not. However, if the insurer or TPA fails to post the required information, the plan violates the disclosure requirements. Related FAQ 12 verifies that plans and insurers are only required to provide information on state surprise billing laws applicable to enrollees in the coverage.
Standard Notice and Consent Form and Model Disclosure Notice Regarding Patient Protections Against Balance Billing
FAQ 13 pertains to the standard notice and consent form that a healthcare provider must use when providing notice and seeking consent from individuals to waive the NSA protections, which is only permitted in certain limited situations. The FAQ also addresses the model notice plans can use to disclose patient protections against surprise billing. The departments revised the initial versions of the standard form and model notice provided for these disclosure purposes. The FAQ clarifies that providers may use either the initial or revised version of the standard notice and consent form for items and services furnished during calendar year 2022. However, providers may use only the revised version for items and services furnished on or after January 1, 2023. Similarly, plans and insurers may use either model notice for plan years beginning on or after January 1, 2022, and before January 1, 2023. For plan years beginning on or after January 1, 2023, only the revised model notice may be used. The various versions of the notices are accessible from the appendices to the FAQs. The revised version of the “Model Disclosure Notice Regarding Patient Protections Against Surprise Billing” applicable to group health plans is accessible from Appendix III at:
Model Disclosure Notice Regarding Patient Protections Against Surprise Billing (cms.gov)
Methodology for Calculating QPAs
FAQs 14 and 15 involve the methodology for calculating the QPA. FAQ 14 explains that if a plan or insurer has contracted rates that vary based on provider specialty for a service code, the median contracted rate (and consequently the QPA) must be calculated separately for each provider specialty, as applicable. This guidance recognizes that providers may only negotiate the rates in a fee schedule for services that they bill. For example, an anesthesiologist’s contract may include rates for anesthesia services that are a result of negotiations with the plan or insurer and that are materially different from the contracted rates the plan or insurer has for the same anesthesia services with other providers in specialties that do not bill for those services. FAQ 15 confirms that if a self-insured group health plan offers multiple benefit package options administered by different TPAs, the plan may allow each TPA to calculate a QPA separately for those benefit package options administered by the TPA.
Requirements for Initial Payments, Notices of Payment Denials, Related Disclosures and Initiation of the Open Negotiation Period and Federal IDR Process
FAQs 16 – 21 address the federal IDR process. FAQ 16 reinforces that plan and insurers must send an initial payment or notice of payment denial within 30 calendar days of the plan’s receipt of an OON provider’s “clean claim” for NSA-covered services, meaning a claim with the necessary information to make a payment determination. FAQ 17 confirms that providers have 30 business days from the day they receive an initial payment or a notice of payment denial to initiate open negotiations with the plan or insurer regarding the billed item or service. This timeframe to initiate open negotiations applies regardless of whether the plan or insurer timely sends the initial payment or notice of payment denial. For this purpose, FAQ 18 explains that the initial payment should be an amount that the plan or insurer reasonably intends to be payment in full based on the relevant facts and circumstances and as required under the terms of the plan or coverage. A notice of payment denial means a written notice from the plan or insurer that states that payment for the item or service will not be made by the plan or coverage and explains the reason for denial (e.g., subject to a deductible not yet satisfied). This notice is distinct from an adverse benefit determination, which is subject to the plan’s claims and appeals process.
FAQ 19 reviews the information plans, and insurers must provide with an initial payment or notice of payment denial when the QPA is used for participant cost-sharing purposes. This information must include the QPA for each item or service, an explanation of any provider billed service codes that were downcoded (i.e., replaced with codes deemed more appropriate but with lower reimbursement rates) and the applicable QPA(s) absent the downcoding, and the contact information, including a telephone and email address, if the provider wishes to initiate a 30-business-day open negotiation period to determine the total payment amount. Question 20 confirms that a provider can still open the negotiation period within 30 business days after receiving the initial payment or notice of payment denial, regardless of whether the plan has satisfied the applicable disclosure requirements. FAQ 21 reinforces that plans and insurers cannot require an OON provider to submit claims through an online portal to initiate the open negotiation process, but instead must accept the standard open negotiation form for this purpose.
Transparency in Coverage Requirements
Finally, FAQs 22 and 23 cover requirements under the TiC final rule. FAQ 22 addresses the requirement that plans publicly post machine readable files reflecting the plans INN rates and historical allowed amounts for covered items and services. The FAQ explains that if a group health plan does not have its own public website, the plan is not required to create one for this purpose but may satisfy the requirements by entering into a written agreement under which a service provider (such as a TPA) posts the machine-readable files on its public website on behalf of the plan. However, the plan must post a link to the historical allowed amount file hosted by the service provider on the plan’s own website, if the plan maintains a public website. If the TPA fails to post the files in accordance with the written agreement, the plan violates the disclosure requirements. FAQ 23 focuses on the TiC participant self-service tool requirement, which is effective for 500 items and services for plan years beginning on or after January 1, 2023. The FAQ provides the website for accessing the initial list of items and services, which will be updated quarterly.
Employers that sponsor group health plans may find the new FAQs helpful in understanding and satisfying the NSA and TiC requirements.
Agencies Issue Update on Status of Federal Independent Resolution Process
August 30, 2022
On August 19, 2022, the Departments of Health and Human Services (HHS), Labor, and the Treasury (the departments) provided a status update on the federal Independent Dispute Resolution (IDR) portal. The departments launched the portal on April 15, 2022, to resolve payment disputes between insurers/plans and providers for certain out-of-network (OON) charges. The portal was discussed in the April 26, 2022, edition of Compliance Corner. The No Surprises Act requires that the departments publish certain information about the federal IDR process for each calendar quarter.
Due to delays in implementation attributed to litigation, the departments have no data to report for the first quarter of 2022. However, they report that for a period beginning on April 15 and ending on August 11, 2022, disputing parties initiated over 46,000 disputes through the portal. Of the disputes initiated during that time, certified IDR entities rendered a payment determination in over 1,200 disputes.
The departments also report that many of these disputes were challenged based on eligibility. They note that non-initiating parties challenged over 21,000 disputes’ eligibility for the dispute resolution process. The departments believe that IDR entities determined that over 7,000 disputes were ineligible for the federal IDR process as a result of these disputes, although the departments point out that the large number of these disputes does not necessarily mean that these disputes are ineligible, only that a party has challenged the eligibility of a dispute and that additional review by the certified IDR entities is necessary to determine eligibility.
The departments also discuss the sources of delay in the IDR process. They point out that the challenges over eligibility were a primary cause of delays in resolving those disputes. However, the departments point out that reviews of these challenges could be processed more quickly when both parties provide all the information required for federal IDR initiation, including the disclosures (in particular, disclosures of the qualifying payment amount and necessary contact information) required of plans and issuers when they make an initial payment or provide a notice of denial of payment and a complete submission by the initiating party. With the expectation that an increased understanding of these requirements will facilitate a faster process, the departments provide a checklist of the information that providers and plans are required to disclose with the initial payment or notice of denial of payment.
Employers, particularly those with self-insured plans, should be aware of the existence of the portal and the process by which an IDR dispute is initiated.
Federal Independent Dispute Resolution Process Status Update »
HHS Releases Chart for Determining Whether Federal or State Independent Dispute Resolution Process Applies
August 16, 2022
The US Department of Health and Human Services (HHS) has released additional guidance to help plans and insurers navigate independent dispute resolution (IDR) when processing claims covered by the No Surprises Act (NSA) balance billing protections. The NSA passed as part of the Consolidated Appropriations Act, 2021, includes surprise billing protections for emergency services, air ambulance services and non-emergency services delivered by nonparticipating providers at in-network facilities. Participant cost-sharing for covered items and services in these protected categories is limited to the in-network cost-sharing amount. The plan or insurer must then address the remaining balance of the bill with the provider. If the parties cannot agree on payment after a 30-day open negotiation period, the IDR process can be initiated to determine the out-of-network rate.
To that end, the chart helps determine whether a claim is subject to the federal IDR process or a state process. The federal IDR process applies to self-insured plans except where the plan has opted into a specified state law process, or an All-Payer Model Agreement applies. As to fully insured plans, while the federal IDR process applies in most states and US territories, a state IDR process applies in Alaska, Georgia, Maine and Michigan. In 18 other states, a “bifurcated process” applies. Plans and insurers in bifurcated process states should consult with the proper state authorities regarding which process applies to a particular payment dispute. When the plan or issuer and provider or facility are in different states, the federal IDR process will apply.
Applicable IDR Process Chart »
For further information on the federal IDR process, please see our Compliance Corner articles on the following dates: February 1, 2022, February 15, 2022, April 26, 2022 and June 22, 2022.
Biden Signs Executive Order on Protecting Access to Reproductive Healthcare Services
August 16, 2022
On August 3, 2022, President Biden issued an executive order that provides more direction to the Department of Health and Human Services (HHS) to provide access to reproductive healthcare services in response to the recent Dobbs decision. The order defines “reproductive healthcare services” to mean medical, surgical, counseling, or referral services relating to the human reproductive system, including services relating to pregnancy or the termination of a pregnancy.
First, the order instructs HHS to consider actions that advance access to reproductive healthcare services, including, to the extent permitted by federal law, through Medicaid for patients traveling across state lines for medical care.
Second, the order instructs HHS to promote the understanding of and compliance with federal nondiscrimination laws by healthcare providers that receive federal financial assistance. Such actions may include:
- (a) Providing technical assistance for healthcare providers that have questions concerning their obligations under federal nondiscrimination laws.
- (b) Convening healthcare providers to provide information on their obligations under federal nondiscrimination laws and the potential consequences of noncompliance.
- (c) Issuing additional guidance, or taking other action as appropriate, in response to any complaints or other reports of noncompliance with federal nondiscrimination laws.
Third, the order instructs HHS to evaluate the adequacy of data collection and analysis at HHS agencies, such as the Centers for Disease Control and the National Institutes of Health, in accurately measuring the effect of access to reproductive healthcare on maternal health outcomes and other health outcomes. Based upon the results of that evaluation, HHS must then take steps to improve those efforts.
Note that it is up to HHS to carry out the directions provided by this order, so some of these instructions may take time to implement. Although the order does not address employer requirements directly, employers should be aware of the administration’s efforts to protect access to reproductive healthcare.
Executive Order on Securing Access to Reproductive and Other Healthcare Services »
First Circuit Finds Against Life Insurer for Ambiguous Plan Terms
August 02, 2022
On July 25, 2022, in Ministeri v. Reliance Standard Life Insurance Co., the US Court of Appeals for the First Circuit found an ambiguous term in an ERISA-governed life insurance policy should be held against the insurer and, applying an interpretation that favored the plaintiff, awarded full benefits with attorneys’ fees and interest.
The plaintiff in this case, Renee Ministeri, sued Reliance Standard Life Insurance Company (Reliance) for life insurance benefits totaling $1,092,000 following Reliance’s denial of her late husband’s coverage on eligibility grounds. The case originated with Anthony Ministeri’s life insurance which was obtained through his employment as a construction services executive beginning on April 1, 2014, and working 24 hours per week. Six weeks later, Mr. Ministeri was diagnosed with glioblastoma, an especially aggressive type of brain tumor. Through the first few months of treatment, he was unable to perform travel-related work duties but continued to work and receive his full salary with approved timesheets reflecting a normal 24-hour work week. Then, after suffering a massive pulmonary embolism, Mr. Ministeri became completely unable to work, necessitating a formal medical leave beginning August 8, 2014. He continued to pay life insurance premiums until his death on October 2, 2015.
Following her husband’s passing, Mrs. Ministeri filed a claim on his life insurance policy with Reliance. The policy contains a provision allowing continued coverage by payment of premiums for twelve months following termination of eligibility due to illness. After twelve months, a sixty-day conversion period applies under which benefits are payable if the insured dies during that period. Linking these continuation and conversion periods together would allow benefits to be payable only if Mr. Ministeri remained eligible until the date his medical leave began. If Mr. Ministeri’s eligibility terminated prior to August 2014, his coverage would have lapsed.
Reliance denied the claim based on the policy’s eligibility criteria which required Mr. Ministeri remain an “Active…Corporate Vice President” working a minimum of 20 hours during a “regularly scheduled work week.” Reliance reasoned that the term “Active…Corporate Vice President” required Mr. Ministeri to continue the normal job duties of his position, which included travel. In addition, Reliance reasoned Mr. Ministeri was no longer completing at least 20 hours of the “regularly scheduled work week” as of May 2014, when he required extensive treatment and short periods of hospitalization. However, the terms “Active…Corporate Vice President” and “regularly scheduled work week” are not defined in the policy. Further, Mr. Ministeri’s employer maintained that while treatments interfered with his ability to travel, Mr. Ministeri’s role with the company shifted to accommodate, and he continued working 24 hours per week until his medical leave began.
In considering the benefits denial, the First Circuit found the terms Reliance relied on – “Active… Corporate Vice President” and “regularly scheduled work week” – were ambiguously stated in the policy. Following its sister circuits, the First Circuit ruled that such ambiguous terms must be construed against the drafter here, Reliance. The court then found that, under a reasonable interpretation of the phrase, Mr. Ministeri could be regarded as an “Active…Corporate Vice President” if he was a non-retired employee holding a job title matching the rank of corporate vice president. Since it was undisputed that Mr. Ministeri was a current employee and had not received a change in job title through the beginning of his treatments, he met the “Active…Corporate Vice President” eligibility criteria until his formal medical leave began on August 8, 2014. As to whether Mr. Ministeri maintained a “regularly scheduled [part-time] work week” of at least 20 hours, the court found that a reasonable interpretation of the phrase would allow for employer-sanctioned schedule flexibility from week to week if a typical part-time workload is maintained. To this point, Mr. Ministeri’s employer repeatedly represented to Reliance that he continued working despite his impairments. Having found Mr. Ministeri met the policy’s eligibility criteria until his medical leave began on August 8, 2014, the court tacked on the policy’s one-year continuation and sixty-day conversion periods to find his life insurance coverage was in effect when he died on October 2, 2015.
While focused on the interpretation of specific terms in the Reliance life insurance policy at issue, the Ministeri case serves as a broader illustration of the risk imposed by imprecise plan language. Where disputed plan terms are found to be ambiguous, a reviewing court will likely interpret those terms against the drafter, whether that be the insurer or plan administrator. As a result, employers should review eligibility provisions in their benefit plans to ensure they are clearly written, faithfully applied, and consistently conveyed in all plan documents and benefit communications. This is especially important with regards to part-time workers and employees on medical leave whose eligibility is more likely to be in flux.
Ministeri v. Reliance Standard Life Insurance Co. »