Circular Letters Address Implementation of CAA Provisions

The Department of Financial Services (DFS) issued a series of circular letters designed to address the implementation of certain provisions of the No Surprises Act (NSA) of the Consolidated Appropriations Act, 2021 (CAA). These provisions became effective for plan years beginning on or after January 1, 2022. The guidance, which is directed at insurers and healthcare providers, outlines the necessary changes to existing state laws and processes to incorporate the NSA requirements.

Circular Letter No. 10 addresses the NSA surprise billing independent dispute resolution (IDR) process and disclosures. The NSA surprise billing prohibitions are designed to protect participants from surprise bills for emergency services, air ambulance services and certain out-of-network services received at in-network facilities. Under the NSA, cost-sharing for protected items and services is determined by the federal IDR process, but only in the absence of an applicable state law.

The guidance explains that state law provides surprise billing protections, so the state’s IDR process will continue to apply to out-of-network emergency services and surprise bills. However, federal protections expand the state’s protections in certain circumstances. As a result, the state’s IDR process was modified to incorporate the more extensive federal requirements beginning on January 1, 2022. These changes expand the types of hospitals, providers and services eligible for the state’s IDR process and eliminate previous exemptions for certain emergency services based on code numbers. Additionally, the state IDR process was revised to align with the federal rules with respect to participant cost-sharing limitations and prohibitions of waivers of the surprise billing protections.

Circular Letter No. 11 focuses on the NSA continuity of care provisions, which allow participants undergoing care for certain conditions, including pregnancy, to continue such care under the same terms and conditions following a provider’s contract termination with the insurer. The letter reminds insurers that they must comply with the NSA, as well as the state’s continuity of care requirements (when the state’s protections are more expansive than those under the NSA).

Circular Letter No. 12 addresses the NSA provider directory and insurance identification card requirements. The NSA adds to the state’s existing law requiring insurers to maintain updated directories of in-network providers. For example, the NSA prohibits insurers from imposing cost-sharing greater than in-network rates when a participant receives a bill for out-of-network services resulting from inaccurate provider network status information. The letter indicates the state’s provider directory and insurance identification card requirements will be updated to include the NSA requirements.

Although the letters are directed at insurers and providers, sponsors of insured plans may want to be aware of these developments.

Insurance Circular Letter No. 10 (2021): The No Surprises Act, Independent Dispute Resolution Process and Disclosure of Protections from Balance Billing | Department of Financial Services »
Insurance Circular Letter No. 11 (2021) | Department of Financial Services »
Insurance Circular Letter No. 12 (2021): Provider Directory and Health Insurance Identification Card Requirements under the No Surprises Act and State Law | Department of Financial Services »