Hello friends! We know it has been a while. All we can say is that we are both working mothers, and we were traumatized by the madness known as the end of the (pandemic) school year. Combine that with the onslaught of mental health parity DOL audits and NQTL analyses we’ve been handling, plus all of the other things on our (and your) to-do lists, made us consider putting this blog on summer hiatus. But, to paraphrase Al Pacino (or depending on your age and preference Steven Van Zandt), just when we thought we were out and about to enjoy a long, restful weekend celebrating the 4th of July, the surprise billing interim final rule (IFR) pulled us back in.
Now, we know that your Outlook is full of analyses of the 411-page rule from law firms, associations, and think tanks because they are filling up our inboxes too. We wrote a few of those detailed breakdowns ourselves—you might have seen them through other sources. But we do not like to be so pedestrian here. Instead, we have picked out five key tidbits from the rule that we find fascinating but do not seem to be getting as much airtime elsewhere.
The “No Surprises Act” section of the Consolidated Appropriations Act of 2021 (CAA) establishes that certain providers who are out-of-network and treat people at in-network facilities may bill people for out-of-network charges if they give them a notice and obtain informed consent. Same thing for people who sought emergency care at an out-of-network facility and then continue to receive care at the facility post-stabilization. So, we were not surprised that a lengthy section of the IFR addresses how providers must give notice and what constitutes consent.
A related provision that deserves more public attention is the notice requirements for issuers and group health insurance plans. Employer plan sponsors 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.
The two of us have chatted a bit about what "make publicly available" means. We have landed on amending plan document language and including the template notice in our annual notice package, plus making sure to post it on plan website portals. That might be overkill, but we would rather be safe than sorry. Plus, we plan on reminding all our self-funded and independent TPA clients that notification needs to be part of EOBs beginning with Plan years starting on or after January 1, 2022.
Maybe we are being dramatic, but we think that this IFR is the biggest thing to hit emergency care since the passage of the Emergency Medical Treatment and Labor Act (EMTALA) in 1986. Specifically, the new rules provide that if a person seeks care based on a "prudent layperson" definition of emergency at an out-of-network facility, the patient may only be held responsible for in-network cost-sharing. So basically—if a prudent layperson would think it is an emergency, it is an emergency—regardless of how medical management standards might otherwise be applied.
What is notable to us is how broad the interim final rule defines “emergency care.” Specifically, emergency services include:
This rule will also completely change the way health plans process emergency care claims. Instead of approving or denying emergency care claims based on diagnostic codes, plans must now review claims on a case-by-case basis to see if the facts and circumstances involved meet the “prudent layperson” standard for emergency care. Plans also cannot restrict coverage based on the time elapsed from the onset of symptoms and when a person seeks care.
Another critical nuance many ignore is that plans cannot deny coverage for qualifying emergency services based on other general plan exclusions. Put another way, just because a plan does not cover something does not mean they can deny an emergency claim for just that. If a covered participant presents with an emergent version of an excluded condition at an out-of-network emergency room, it is a covered service. For example, let’s say a plan excludes maternity benefits for individuals covered under the plan as dependent children. If a child dependent goes to an out-of-network emergency room in labor, then the delivery and any post-stabilization services for the mother and the baby must be covered by the plan.
From an employer-sponsored plan perspective, now would be a good time to check your plan documents. If any include a definition of "emergency care" or sets conditions on how the plan pays emergency care claims, now would be a good time to check and see if that language needs fixing. We bet that it does.
Thirteen states have comprehensive surprise billing laws on the books that predate the federal protections. The federal law allows for stricter state-level protections and defers to state-established amounts regarding how plans must pay providers.
The IFR also lays out methods health plans and providers will rely on in the payment negotiation process that must proceed all requests for dispute resolution. The order that entities must follow is:
The rule clarifies self-funded plans are not subject to state all-payer agreements or state-specified payment requirements. Still, if a self-funded plan wants to, it can opt into a state-level payment amount instead of using its QPA as its "final offer" to a provider before the 30-day deadline.
This all makes us wonder, will states make any changes to their existing laws to conform with the federal requirements? Or will we have a patchwork of protections statewide? On the self-funded side of the market, will many plans (or perhaps more accurately TPAs) want to opt into state-level specifications for payment? Will they opt to stick with their own QPAs? On the surface, it would seem like checking to see which would be the best deal would be prudent, but is this a sustainable strategy when processing thousands of claims? Guess we will have to wait and see!
Speaking of QPAs, before the release of the IFR, many people (us included) were speculating about how the Biden Administration would structure the rules plans need to use when determining their QPAs. It was unclear how the QPA would work when group plans did not have enough data to develop their QPAs, and how all of this would work with plans that do not use a network or set contract rates but instead use a reference-based price to guide provider payments.
The IFR does not answer all our questions, but it gives guidance about quite a few, and in some ways we find interesting. First, instead of specifying that individual self-funded groups need to develop their own QPAs, the rule allows TPAs to create combined QPAs based on aggregated data from all the groups the TPA administers. Also, the regulation specifies that one-off agreements with a provider for payment do not constitute a contract and do not have to factor into the median contract rate, which is interesting for RBP plans. Plus, the rule specifies that if a group has a reference payment rate it uses, that should be the basis for its QPA.
We saved our favorite part for last. While we found all the surprise billing details fascinating, they did not spark joy. However, the preamble section that outlines the Biden Administration's timeline for issuing the rest of the regulations needed to implement the other parts of the No Surprises Act had us happily reaching for our bullet journals. Policy details combined with the need to make planning lists and fill out calendar pages in our paper planners? True nerdy bliss. (Reminder: this is a “no judgment” zone…)
In case you missed this two-paragraph golden nugget hiding on page 17 of 411, allow us to explain your future quickly. The CAA contains many other sections that affect health insurance coverage and group benefit plans. The effective dates for all of them are December 27, 2021, or plan years beginning on or after January 1, 2022. More regulatory guidance is necessary to implement them, and before this rule, no one knew if or when it was coming. Now we have a rough schedule!
Rules Coming Relatively “Soon”
Rules Coming Much Later in the Year/Possibly Next Year – aka Sections of the Law Very Likely to Have an Enforcement Delay
For the potentially delayed sections of the No Surprises Act, the Administration promises future rules “will include a prospective applicability date that provides plans, issuers, providers, and facilities, as applicable, a reasonable amount of time to comply with new or clarified requirements.” They also promise a good faith compliance standard for health plans and issuers until they publish regulations to address these requirements. Finally, the Administration will “issue guidance in the near future regarding their expectations related to good faith compliance with these provisions.” AKA government-speak for "we need more time, so you get more time."
So those are our top five standouts, friends! Did you find anything notable or surprising in the IFR? Let us know! We would love to chat about it with you!