On July 1, 2021, the US Departments of Health and Human Services (HHS), Treasury and Labor, and the Office of Personnel Management issued an Interim Final Rule with comment (IFR) implementing portions of the No Surprises Act, legislation enacted in December 2020 that bars surprise billing beginning January 1, 2022.
Under the law, payers and providers (including hospitals, facilities, individual practitioners and air ambulance providers) are prohibited from billing patients more than in-network cost-sharing amounts in certain circumstances. The prohibition applies to both emergency care and certain non-emergency situations where patients do not have the ability to choose an in-network provider.
The law establishes a pathway for resolving payer-provider payment disputes using negotiation and arbitration. If entities are unable to come to an agreement, the independent dispute resolution (IDR) process requires each party to submit a final payment offer, and the arbiter will select one of these offers as the final payment amount (commonly referred to as “baseball style” arbitration). In selecting the final payment, arbiters must weigh certain factors and are banned from considering the lower payment rates paid by federal government programs (e.g., Medicare and Medicaid).
The No Surprises Act directs payers to determine the patient’s cost-sharing amount based on all-payer models (if applicable), state law or a new term, the qualifying payment amount (QPA). The QPA is important as it also impacts the IDR process as one factor that the arbiter must consider when selecting between a payer and provider’s offer for reimbursement.
This IFR establishes regulations defining the payment methodology. The regulation proposes the methodology payers must use to determine cost sharing and the QPA, information payers must share with out-of-network providers, the process for submitting and receiving consumer complaints, and the format and details of the notice and consent requirements.
Stakeholders will have 60 days to comment on the IFR once it is published in the Federal Register. The Departments will issue the No Surprises Act regulations in several phases. The second regulation should be published by October 1, 2021, and will establish a payer audit process. The third regulation should be published by December 27, 2021, and will detail the independent resolution dispute process and patient transparency provisions.
For more information, contact Kristen O’Brien, Katie Waldo, Eric Zimmerman, Jason Caron (McDermott Will & Emery, Partner), Emily Curran (McDermott Will & Emery, Associate), or Judith Wethall (McDermott Will & Emery, Partner).