As mentioned in the previous article, the Consolidated Appropriations Act (CAA) of 2021, which was signed into law at the end of 2020, included several provisions on COVID-19 relief in addition to a host of other provisions, most notably a ban on balance billing, also known as surprise billing. This week NAHU submitted a letter to the relevant federal agencies outlining our questions and concerns surrounding the implementation of this balance-billing ban.

Section 202 of the CAA will hold patients harmless from surprise medical bills, including from air ambulance providers, by ensuring they are only responsible for their in-network cost-sharing amounts in both emergency situations and certain non-emergency situations where patients do not have the ability to choose an in-network provider. For other claims, this new surprise-billing agreement utilizes arbitration, but requires the arbiter to consider the median in-network rate for the service in question. The law states that by July 1, the Departments are required to publish regulations establishing methodologies for group health plan sponsors and health insurance issuers to determine the qualifying in-network cost sharing amounts for surprise bills by insurance market size. Even though consumers are initially held harmless, they ultimately bear any cost increase caused by the law’s implementation. Health plans are anticipated to pay more in claim costs, and in the self-funded realm, this will translate more directly and more quickly into higher contributions from individuals.

In our comments, NAHU requested that “new plans” should include self-funded groups that have significantly altered their plan design from the prior year and/or switched administrative service providers. We also requested further guidance on how “new plan” alternative methodologies will apply to those entities that use alternative reimbursement methodologies, such as plans that do not rely on a provider network but instead use a referenced based pricing model or those that utilize value-based payment strategies. Another area where more regulatory detail is needed concerns the length of time a plan or issuer will be considered to be a new market entrant for the purpose of determining the qualified payment amount.

We directed the Administration’s attention to transparency rules released by the Trump Administration in October 2020, which require all non-grandfathered health plans to publicly disclose in-network provider negotiated rates, historical out-of-network allowed amounts, and drug-pricing information through three machine-readable files posted on a website by January 1, 2022. In conjunction with this surprise-billing ban, all individual and group health plans will ultimately be required to give plan participants pre-claim access to detailed and personalized cost estimates. However, once the rates providers typically accept for services rendered from all kinds of payers are accessible, significant disruption to the traditional health plan network structure may occur. NAHU noted that any future rules should be carefully constructed to accommodate fluidity when it comes to reimbursement arrangements and health plan providers, but still balance the need for consumer protection.

One of the most critical provisions in the No Surprises Act is its utilization of the arbitration process. NAHU had always opposed arbitration as a solution to balance billing because of the potential to increase costs for health plans and thereby increase costs for consumers. In our comments this week we requested that the Departments focus on consistency and administrative efficacy so that administrative costs stay as low as possible. NAHU recommended that regulations should require arbitrators to begin with the qualifying payment amount (QPA) as a neutral market-based rate. Then, the arbitrators should be governed by clear administrative guidelines regarding the application of any of the other permissible criteria and how each may be used to adjust the base qualifying payment amount. Once those criteria are applied, the arbitrators should be required to select the offer that it is closest to adjusted amount and document their reason and direct evidence used when selecting a particular offer. By establishing a formulaic approach to independent dispute resolution, the Departments will go a long way towards ensuring that all parties engage in fair negotiations during the initial 30-day period, since they will have a clear idea about what to expect should they elect to move forward with arbitration.

Regarding arbitrators, NAHU recommend an annual certification process for entities that wish to oversee independent dispute resolution.  In any publication the Administration produces to assist in the selection of an independent dispute resolution entity, there should be clear disclosure of the number of cases an entity is capable of adjudicating and associated fees. We also requested that the outcome of each instance of independent dispute resolution be made public.

In addition to these recommendations, we sought clarification on: what constitutes an in-network arrangement and what constitutes an out-of-network provider, how this law impacts the authority of state-level surprise billing protections, how a state’s payment methodology relates to the law, which advanced diagnostic laboratory tests might be performed by an out-of-network provider at an in-network facility but are not subject to the law, and more guidance outlining the parameters of post-stabilization out-of-network (OON) care when it comes to emergency care claims.