The No Surprises Act contains a prohibition on surprise billing, which impacts Affordable Care Act (“ACA”) provisions governing provider choice and emergency room parity rules.
The Interim Final Rule will be finalized on September 13, 2021 and apply for plan years beginning on or after January 1, 2022.
A. ACA Provider Choice and Emergency Room Services Rules
Under the ACA, most group health plans that require designation of a participating primary care provider must allow the participant or beneficiary to designate an available, participating primary care provider of their choice. Such plans are required to inform participants of their ability to make a designation or, if the participants do not make a designation, that a provider a primary care provider will be designated for the participant.
The ACA did not extend the provider choice requirements to “excepted benefits” such as stand-alone dental or vision plans. Under the ACA, grandfathered health plans were exempt from the provider choice rules.
In addition, under the Public Health Service Act (“PHSA”) – as amended by the ACA – emergency services are required to be provided:
- Without prior authorization (whether they are provided by an in-network or out-of-network provider);
- Without regard to whether the health care provider furnishing the emergency services is a participating network provider with respect to the services; and
- Without imposing administrative requirements or limitations on the coverage that are more restrictive than those that apply to in-network providers when emergency services are provided out-of-network.
The ACA also required compliance with certain cost-sharing requirements for out-of-network emergency services, although providers could still balance bill after the plan made a reasonable payment meeting certain minimum payment standards. Like the provider choice provision, the emergency services requirements did not apply to grandfathered health plans.
B. No Surprises Act
The No Surprises Act sunsets the emergency services provisions of the ACA effective January 1, 2022 and replaces it with new emergency services requirements for group health plans, and recodifies the provider choice provisions. The No Surprises Act also extends the recodified provider choice requirements and the new emergency care provisions to all group health plans, except excepted benefit plans. This means that all non-excepted group health plans – fully insured, self-funded, grandfathered, and non-grandfathered – must comply with these requirements.
The new emergency services requirements protect individuals from surprise medical bills by requiring all non-excepted group health plans and issuers that cover hospital emergency room services or emergency services provided in a freestanding, independent emergency department, to cover services without imposing any prior authorization or limitation on coverage. These rules apply regardless of whether the provider is a participating provider or an emergency facility. In addition, any participant cost-sharing requirements for out-of-network emergency services providers or facilities must be the same as cost-sharing requirements for in-network emergency services providers or facilities and must be counted towards any applicable in-network deductible or out-of-pocket maximums under the plan.
The No Surprises Act requires group health plans and issuers to cover non-emergency services provided by out-of-network providers working at in-network facilities, as well as air ambulance services provided by out-of-network providers, using the same general approach as emergency services described above.
Balance billing is prohibited in many situations (e.g., for emergency services and certain ancillary services connected to non-emergency care at in-network facilities, such as anesthesiology services or radiology services provided by out-of-network providers contracted by the in-network facility). In other non-emergency situations, balance billing may be permitted only if the non-participating facility or provider meets certain, strict advance notice and consent requirements.
The No Surprises Act instructed the DOL, IRS, and HHS to develop rules by July 1, 2021, that include the procedures the group health plan can use to determine the qualifying payment amount, information the group health plan must share with the nonparticipating provider or facility, geographic regions, and a process to receive complaints of violations. The Interim Final Rule fulfills that requirement.
Interim Final Rule
The Interim Final Rule defines “emergency medical condition” and “emergency services” similarly to how those terms are defined under the Emergency Medical Treatment and Labor Act (“EMTALA”); however, the definition of “emergency services” includes pre-stabilization services provided after a patient is moved out of the emergency department and admitted to a hospital such that these services are protected under the No Surprises Act. “Emergency services” also include certain post-stabilization services.
The Interim Final Rule sets forth the procedures that group health plans can use to determine cost-sharing amounts for: (1) out-of-network emergency facilities; (2) out-of-network emergency providers; and (3) certain non-emergency services furnished by out-of-network providers at certain in-network facilities.
In addition, certain healthcare providers and facilities, as well as health plans and health issuers are required to make a notice publicly available, post on a website (for health plans, that would be a website of the plan), and provide individuals a notice about:
- The restrictions on balance billing in certain circumstances;
- Any applicable state law protections against balance billing; and
- Information on contacting appropriate state and federal agencies in the case that an individual believes that a provider or facility has violated the restrictions against balance billing.
Health plans and issuers are also required to include the above information on each Explanation of Benefits containing an item or service for which the No Surprises Act applies. The agencies have released a model notice for health plans and issuers.
Practical Impact on Employer-Sponsored Group Health Plans
Employers who sponsor group health care plans should consult with legal counsel to ensure that their plans are prepared to comply with the No Surprises Act as of January 1, 2022. This includes compliance with disclosure requirements on Explanations of Benefits, as well as ensuring that all Plan documents and Summary Plan Descriptions are updated as needed. Further, employers should prepare to comply with the applicable notice requirements by customizing the Model Notice provided by the agencies.
Author: Emily Langdon
This article has been prepared for general information purposes and (1) does not create or constitute an attorney-client relationship, (2) is not intended as a solicitation, (3) is not intended to convey or constitute legal advice, and (4) is not a substitute for obtaining legal advice from a qualified attorney. Always seek professional counsel prior to taking action.