Recently, we’ve been discussing the new federal surprise billing protections. Those of you who live fuller, more interesting lives than we do might have neither the time nor the inclination to discuss details about The No Surprises Act. What can we say? We are weird, and therefore acutely aware that balance billing protections kick in for all individual and group health plans starting with the first day of each plan’s 2022 policy year. That means, for individual and group plans that started their 2022 plan year on January 1 or February 1, potentially affected claims are rolling in right about now, and all covered health plan sponsors better be ready.
As a reminder, the new law generally holds consumers harmless for out-of-network cost-sharing and balance bills for air ambulances, emergency services at out-of-network facilities, and out-of-network providers offering care at in-network facilities under specific circumstances. Instead of sending consumers a bill for these services, providers and health plans must work out the payments for services rendered. Ideally, the parties will agree on an appropriate payment amount during a mandatory 30-day negotiation period. If they cannot, either party can request a "baseball-style" winner-takes-all arbitration based on specified criteria. Fully insured group health plans will be able to rely on their health insurance carrier to handle all these negotiations for them. Self-funded plans, including level-funded plans, need to check their administrative services agreements to see exactly how much responsibility they might bear for decision-making. Someone needs to take charge when a claim subject to the law can’t be resolved within the thirty-day open negotiation window. Who will make decisions and represent the plan when it comes to arbitration? If a self-funded group hasn’t ironed out the pertinent details with their TPA yet, they need to STAT!
Besides our general concern that some self-funded groups may not be ready, there are two other things about the surprise billing rollout that have had us talking lately. First, the new protections have been a hot news topic recently because a federal district court judge invalidated part of the federal regulation governing how the arbitration process and independent dispute resolution (IDR) decisions will work. (Okay this might not be national news, but it’s a big deal to the nerdy health law publications that we like to read.)
We’ve heard some people wonder if this decision means that surprise billing arbitrations will be put on hold. The answer is absolutely not—the decision specifically allows the new arbitration process to carry on as planned. However, IDR entities overseeing arbitrations may not assume the appropriate rate for an out-of-network payment is the plan's self-reported median in-network rate (a.k.a. the qualified payment amount or QPA). Instead, they will need to equally consider other factors, such as the provider's level of experience and training, when choosing between each party’s best payment offer.
The Biden Administration issued a memorandum on February 28 emphasizing that all other provisions of the surprise billing rule are still in effect and arbitration will be happening soon. The document outlines the steps the Administration is taking to comply with the court order, including: (1) withdrawing guidance documents related to the parts of the rule the court invalidated, (2) updating and reissuing that guidance, and (3) providing training on the revised guidance for certified IDR entities and affected parties.
To really show they are serious about implementing the surprise billing protections, the Administration is opening the federal portal where affected parties may request to begin the IDR process. Since in some cases, the mandatory 30-day negotiation window has expired, the Administration will permit providers or health insurance issuers or group plans to initiate the IDR process within 15 business days following the opening of the IDR Portal. Put another way, the first surprise billing arbitrations are days away from starting, and we are very curious about how the rollout will go. And, yes, we are having flashbacks to the original rollout of the Federal Exchange—but, we do not wish that fate upon anyone—regulators are people too…
The other thing that has us buzzing is the part of the new rules that require health plans to cover “emergency services” without prior authorization. Emergency care is defined broadly for the purposes of these rules. Specifically, emergency services include:
These services also expressly include:
Now, we know that MOST people do not spend hours and hours of each week happily looking at ERISA plan documents, but we do. So, trust us when we tell you that we haven’t seen an SPD yet that defines emergency care this broadly, which is going to be a problem.
The new rules also limit a plan’s ability to deny emergency claims. Specifically, plans may not automatically deny emergency claims based on a list of final diagnosis codes. Instead, plans must review claims on a case-by-case basis to determine if the “prudent layperson” standard has been met before denying an emergency services claim. Under this standard, a claim for emergency services must be covered if treatment is sought due to:
“A medical condition [including mental health or substance use disorders] of sufficient severity (including severe pain) such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in a condition…(1) placing the health of the individual (or with respect to a pregnant woman, the health of the woman or her unborn child) in serious jeopardy, (2) serious impairment of bodily functions, or (3) serious dysfunction of any bodily organ or part.”
Also notable for these purposes, plans are prohibited from:
Based on what we know about claims-payers (which, in all modesty, is slightly more than the average American), we’re pretty sure that none of them previously employed this standard when evaluating emergency care claims. We’re also willing to bet, maybe not our houses but at least our Rothy’s collections, that most health care claims payers and processors are not prepared to run with this standard yet. Which means that we might have a disaster in the making. Kaiser Health News recently documented a 2020 case involving the emergency delivery of pre-term twins at an out-of-network provider and how provider documentation problems and the health plan’s take on what constituted an emergency resulted in a whopping balance bill. While the No Surprises Act was intended to prevent such situations, we are worried that confusion about how the new emergency care standards will work will lead to more situations like the one described.
What do you think friends? Are self-funded plans, health insurance issuers, and third-party claims administrators ready for federal surprise billing protections? Do you think we are crazy nerds for worrying about it? Or are we onto something? Let us know what you are thinking.