Federal Regulations: Requirements Related to Surprise Billing; Part II

Federal Regulations: Requirements Related to Surprise Billing; Part II

On October 7, 2021 the Department of Labor Employee Benefits Security Administration (EBSA), Department of Health & Human Services (HHS), Internal Revenue Service (IRS), and Office of Personnel Management (OPM) issued its second set of interim final rules implementing certain provisions of the No Surprises Act. These regulations are effective as of the date of their publication, October 7, 2021, and they are generally applicable to plan/policy years beginning on or after January 1, 2022. Federal Register: Requirements Related to Surprise Billing; Part II

As a reminder, the No Surprises Act was enacted as part of the Consolidated Appropriations Act of 2021. The No Surprises Act generally prohibits surprise billing to individuals in the following 3 scenarios:

  • Items/services provided at an out-of-network facility
  • Items/services provided by an out-of-network provider at an in-network facility
  • Air ambulance services

The No Surprises Act carves a small exception to balance billing for items/services provided by an out-of- network provider at an in-network facility, if the provider makes certain disclosures to the enrollee/individual, and the individual gives their informed consent to receive the item/service (thereby waiving the balance billing protections). This exception is not available in certain circumstances where surprise bills are likely to occur, such as for ancillary services provided by out-of-network providers in an in-network facility, such as, for example, radiology or anesthesiology.

Because the No Surprises Act prohibits plans from issuing a balance bill to the plan enrollee, it’s up to the plan and the out-of-network facility or provider to come to an agreement on payment.

The July 2021 regulations, Federal Register: Requirements Related to Surprise Billing; Part I, focus on calculating the enrollee/individual’s cost-sharing amounts for the above-listed items/services. The July regulations also include specific notice and consent requirements to satisfy the exception to balance billing.

The October regulations focus on the resolution of balance billing through the newly established Independent Dispute Resolution process.

Independent Dispute Resolution Process

As you may recall, the parties in dispute, i.e. the plan or issuer on one side, and the provider or facility on the other, can negotiate among themselves to reach an agreement on the amount payable for the items/services provides. The dispute resolution process actually begins with an open negotiation period of 30 days between the parties.

For parties that cannot come to an agreement in that time, there is the Independent Dispute Resolution (IDR) process. Note: this IDR process is between the plan/issuer and the out-of-network facility or provider; it is different from the payment negotiation process between a patient and their plan, i.e. the claim, appeal, and external review process. The No Surprises Act and these regulations also outline a Selected Dispute Resolution (SDR) process for payment disputes between providers/facilities and uninsured (or self-pay) individuals. The SDR process will not be discussed in this article.

Parties can continue own negotiation

The regulations largely provide additional clarity on the IDR process outlined in the statute. First, the regulations clarify that although the parties can enter the Independent Dispute Resolution process, the parties are free to continue negotiating among themselves. If an agreement is reached between the parties before the IDR entity’s determination, the parties’ own agreement controls.

Selection of IDR entity

The parties must jointly select an IDR entity from a to-be established Federal IDR portal directory of certified IDR entities. The party initiating the IDR process can indicate their preferred IDR entity, and the non-initiating party can accept or object to the initiating party’s IDR entity recommendation. The parties have, altogether, 3 business days to finalize their IDR entity selection.

Submission and Selection of Offer

No later than 10 business days after the IDR entity is selected, each party must submit their proposed amount payable offer through the Federal IDR portal.

No later than 30 business days after the IDR entity is selected, the IDR entity will choose among the proposed offers. The regulations clarify that it is not the role of the IDR entity to determine whether the each party’s offer has been calculated correctly, but rather, to consider whether each party has presented credible information informing the circumstances on which each party’s offer was calculated.

The IDR entity is also prohibited from considering:

  • Usual and customary charges, i.e. the amountproviders in a geographic area usually charge for the same or similar medical service.
  • The amount that would have been billed to eithera plan or issuer, or a participant, beneficiary, or enrollee by a provider, facility, or provider of airambulance services if the provider, facility, or provider of air ambulance services were not subject to a prohibition on balance billing.
  • Payment or reimbursement rates payable by apublic payor, in whole or in part, for items and services furnished by the providers, facilities, or providersof air ambulance services. This prohibitionincludes payments or reimbursement rates under Medicare, Medicaid, Children's Health Insurance Program (CHIP), and TRICARE.

The IDR entity will issue its decision to the parties in writing, and the plan or issuer has 30 calendar days from the date of the determination to render payment to the provider or facility.

Other issues

In addition to the IDR process outlined above, the regulations establish the IDR entity’s recordkeeping and reporting requirements, and a process by which an individual, a provider, a facility, a plan, or an issuer may petition for the denial or revocation of an entity’s IDR certification.

The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. This information is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.

Federal Regulations: Requirements Related to Surprise Billing; Part IIhttps://www.cbiz.com/Portals/0/Images/No Surprises Act.jpg?ver=2fiIaaMqibzrQw4KbxRisA%3d%3dA second set of interim final rules were issued implementing certain provisions of the No Surprises Act. 2021-11-07T20:00:00-05:00A second set of interim final rules were issued implementing certain provisions of the No Surprises Act. Regulatory, Compliance, & LegislativeEmployee Benefits ComplianceNo