Insights

Agencies Publish Interim Final Regulations Regarding Surprise Billing Arbitration


On September 30, 2021, HHS, the DOL and the Treasury Department released Part II of interim final rules implementing the No Surprise Billing Act (the Act) that was part of the Consolidated Appropriations Act, 2021 passed by Congress in late 2020. This set of interim rules focus on the independent dispute resolution process (IDR) between the payer and provider outlined in the Act, good faith cost estimates for the uninsured, the dispute resolution process for patients and providers, and rights to external review. Part I of these rules was published in July and is discussed in our July 7, 2021, article in Compliance Corner.

An interim final rule is a rule that an agency promulgates when it finds that it has good cause to issue a final rule without first issuing a proposed rule. Although interim rules are often effective as of the date of their publication, they will have a comment period after which the interim rule may be amended in response to public comments. In this case, the interim final rules are effective 60 days from the date they are published in the Federal Register. The 60 days serve as the comment period for the interim final rules.

IDR Process
The rules describing the IDR process are effective beginning January 1, 2022. They apply to out-of-network providers, facilities, providers of air ambulance services, plans, and issuers in the group and individual markets who need to determine the out-of-network rate for those items and services for which balance billing was prohibited under Part I of the rules.

Under these rules, payers and out-of-network providers have 30 days to negotiate privately to resolve a payment dispute. This “open negotiation” period starts when a provider notifies the payer in writing of its desire to initiate proceedings within 30 days of initial payment or denial from the payer.  If the parties fail to settle the matter in that time, then either party can begin the IDR process within four days after the initial 30-day window closes. The parties then may jointly select a certified independent dispute resolution entity (which must certify that it has no conflict of interest with either party) to resolve the dispute (the “arbiter”). Note that if the parties cannot agree to an arbiter, then federal officials will select one.

Once the arbiter is selected, the parties will submit their offers for payment along with supporting documentation. The arbiter works from the presumption that the qualified payment amount (QPA) is the appropriate out-of-network amount for the item or service. The QPA is the insurance plan's median contracted rate for the same or similar service in an area, so the offer of payment closest to the QPA will usually be awarded. However, the arbiter must consider any credible documentation submitted to it by a party, and if it clearly demonstrates that the value of the item or service is materially different from the QPA, then the arbiter can deviate from the offer closest to the presumptive amount. The arbiter has 30 days to issue a binding written determination selecting one of the parties’ offers as the out-of-network payment amount.  It should be noted that while both parties pay an administrative fee at the beginning of the IDR, the winning party gets this fee refunded.

The rules also provide a process to follow to become a certified independent dispute resolution entity. Applications must be submitted by November 1, 2021, if an entity wishes to be certified by January 1, 2022. More information about the process can be found here.

Good Faith Estimates for the Uninsured
The rules also require providers and facilities to provide a good faith estimate of the expected charges for items and services to an uninsured individual (or individuals that choose to pay for the item or service themselves). The good faith estimate must include expected charges for the items or services that are reasonably expected to be provided together with the primary item or service, including items or services that may be provided by other providers and facilities.

Since it will take time for providers and facilities to develop procedures for determining good faith estimates and providing them to the uninsured, HHS will exercise its enforcement discretion in situations where a good faith estimate provided to an uninsured (or self-pay) individual does not include expected charges from other providers and facilities that are involved in the individual’s care, for good faith estimates provided to uninsured (or self-pay) individuals from January 1, 2022, through December 31, 2022.

Dispute Resolution Process for Patients and Providers
When an uninsured individual receives a good faith estimate, but the ultimate bill is a substantially higher amount (which is defined in Part I of these rules, but generally is an amount at least $400 more than the good faith estimate), then Part II provides a dispute resolution process by which the uninsured individual can challenge the billing.

External Review
Part II expands on rules previously issued by the Departments regarding external review of claims and appeals. The original rules require plans to provide an external review process that claimants can follow when they receive final internal adverse benefit determinations. The new rules allow claimants to follow this process when they receive determinations that involve whether a plan or issuer is complying with the surprise billing and cost-sharing protections under the Act and its implementing regulations as well. The new rules also extend this requirement to grandfathered plans, but only to the extent that a claimant receives a determination related to the Act.

Employers should be aware of these new regulations, as they would have an impact on how self-insured plans are administered as well as how carriers interact with providers in fully insured plans.

Requirements Related to Surprise Billing; Part II »