Comply With Us

Five Fascinating Parts of the Surprise Billing Rule People Seem to Be Overlooking

July 13, 2021

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.

  1. The Disclosure Requirements for Group Plans

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.

  1. The New Emergency Care Reality

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:

  • An appropriate medical screening to determine if an emergency medical condition exists; and
  • Further medical examination and treatment to stabilize the individual. 
  • Pre-stabilization services provided after the patient is moved out of the emergency department and admitted to the hospital; and
  • Post-stabilization services, unless:
  1. The attending emergency physician or treating provider determines the patient can travel using nonmedical or non emergency medical transportation, and the patient can travel to an available participating provider or facility located within a reasonable travel distance, considering the patient’s medical condition; and
  2. The provider or facility satisfies notice and consent criteria; and
  3. The patient (or their authorized representative) is in a condition to provide informed consent under applicable state law; and
  4. Any other requirements or prohibitions that exist under applicable state law are met.

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. 

  1. The Impact on State-Level Balance Billing Requirements

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:

  • Plans have 30 days from the date they receive a bill from an out-of-network provider/facility to send a payment (which can be any amount determined fair by the plan) or deny the claim; 
  • If the provider/facility does not accept the plan’s payment as payment in full, the parties have 30 days to resolve the matter privately; 
  • Suppose the plan and provider/facility do not resolve the billing issue within 30 days. In that case, the plan must pay the provider/facility based on an "in-network rate" calculation described below (this is where the state balance billing laws may kick in):
  1. An amount determined by an applicable All-Payer Model Agreement.  These are agreements that certain states, most notably Maryland, have reached with the Centers for Medicare & Medicaid Services (CMS) that set specific pricing which all payers in the state abide by in paying for certain services; or  
  2. If no All-Payer Model Agreement exists, the amount determined under state law; or
  3. If neither of the above applies, the lesser of the actual billed charge or the "qualified payment amount" (or QPA) – generally the plan's median contracted rate.

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!

  1. QPAs and TPAs and RBPs, Oh My!

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.


  1. Predicting Our Future

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” 

  • The rest of the guidance necessary to implement the Surprise Billing provisions of the law. The Biden Administration promises new regulations on the arbitration process, air ambulance protections, and price disclosure requirements for providers and plans.
  • Regulations for issuers offering short-term limited duration health insurance coverage.
  • Details about the online/telephone-based price comparison tool that health plans must make available to participants.  This one is sorely needed. If we are all expected to have our tools ready by January 1, 2022, information on exactly how to build it would be nice.  It is unclear if this regulation will also address the "advance EOB requirement" plan sponsors need to worry about or if it will just focus on the online tool.  Part of us hopes it will cover both sections of the law because that will make preparing easier. The other part is hoping that the Biden Administration got bored reading the 5,991 pages of the CAA and forgot about those pesky new advance EOB requirements. 
  • Rules better outlining the compensation disclosure requirements for health insurance agents, brokers, and other service providers who work with individual market plans.    

Rules Coming Much Later in the Year/Possibly Next Year – aka Sections of the Law Very Likely to Have an Enforcement Delay

  • Changes to health insurance ID cards
  • Requirements concerning the accuracy of health plan network directories.
  • Provisions about continuity of care when Plan networks change.
  • Prohibition on “gag clauses.”
  • The ginormous new requirement that all employer group health plans of all sizes and funding structures annually disclose all kinds of Rx and health care claims data that they do not have access to today annually to the federal government.  We like to call this one the 55,000 because it would work sort of the Form 5500 disclosure, but it is ten times more complicated (would apply to about 1000 times more employers). 

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."

Notable Omission

  • Lamentably missing on the Biden Administration’s to-do list is more guidance related to compensation disclosure requirements to employer-sponsored group health plans. This omission is a considerable disappointment/probable source of our future nightmares because this section of the law places a TON of responsibility on employers. We would bet the child who is irritating us most today that only .0001% of American businesses that offer health insurance coverage to employees are aware of all of the new "duties" that are looming next year.  Not having added guidance to help employers and advisors know HOW to comply with this rule certainly won’t help matters.

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!