No Surprises Act

On Dec. 27, 2020, Congress passed, and President Trump signed, the No Surprises Act as part of the Appropriations bill. The No Surprises Act, which is a law not guidance, goes into effect for plan or policy years beginning on or after Jan. 1, 2022.

The surprise billing legislation establishes federal standards to protect patients from balance billing for defined items and services provided by specified doctors, hospitals and air ambulance carriers on an out-of-network basis. The federal law applies to individual, small group, and large group fully insured markets and self-insured group plans including grandfathered plans. The legislation caps patient cost-sharing for out-of-network items and services at in-network levels and requires providers to work with insurers and health plans to negotiate remaining bills. If the insurer/health plan and the provider are unable to reach agreement, an Independent Dispute Resolution (IDR) process, sometimes called arbitration, was established to determine the reimbursement amount.

There are federal rules and processes yet to be developed, and questions about scope and applicability as it relates to state laws still to be answered. We will continue to update our customers as more is known.

Frequently asked questions (FAQs)

What are some of the key features that are in the No Surprises law?

The No Surprises Act is a law establishing federal standards to resolve surprise bills for the fully insured individual, small group, and large group markets and for self-insured group plans including grandfathered plans for plan and policy years beginning on and after January 1, 2022. The law applies to emergency services at out-of-network (OON) hospitals and free-standing emergency facilities, OON providers at in-network (INN) facilities, and OON air ambulance carriers.

The No Surprises Act establishes an Independent Dispute Resolution (IDR) process, also referred to as arbitration, to resolve disputes between OON providers and insurers/health plans and prohibits balance billing by OON providers with certain exceptions. The law does not apply if the member chooses to receive items and services from an OON provider.

The Departments of Health and Human Services, Labor, and the Treasury will clarify a number of important provisions of the No Surprises Act though rulemaking later this year.

What providers and facilities does the No Surprise Act apply to?

No Surprises Act applies to three types of health care providers and facilities:

1. OON emergency covered items and services.
2. Covered medical items and services performed by an OON provider at an INN facility.
3. OON air ambulance items and services.

How are prior authorization, coverage limits, and member cost-sharing treated for OON services subject to the No Surprises Act?

Insurers/health plan are prohibited from requiring prior authorization for OON emergency services and may not apply coverage limitations for OON emergency services that are more restrictive than those for INN services.

Insurers/health plans cannot apply cost sharing for OON covered items and services that is greater than cost-sharing applied to INN covered items and services (e.g., 10% coinsurance for same INN and OON covered items and services). All OON cost-sharing must be counted toward any INN deductible and cost-sharing limits.

What do payers have to do when they receive a bill for OON services covered by the No Surprises Act?

Insurers/health plans have 30 days after they receive a bill to either pay the “out-of-network rate” directly to the provider or deny the claim. The out-of-network rate is the difference between the member’s cost-sharing amount and the following:

• If the insurer/health plan and OON item or service is covered by a state law that establishes the reimbursement rate, that rate will apply.
• If the state does not have an applicable law, either the amount agreed to by the insurers/health plan and provider or the amount set by the IDR process.
• If the state has an All-Payer Model Agreement, the reimbursement is set by that agreement.

Who can request an Independent Dispute Resolution (IDR)?

Either an insurer/health plan or a provider may request independent dispute resolution. There is a 30-day negotiation period to resolve disputes over reimbursement for OON covered items and services. The negotiation period starts after the provider receives payment or a claim denial as discussed above. Four days after the end of the 30-day negotiation period, either the insurer/health plan or the provider can request an IDR.

How does the IDR process work?

The law includes a measure to have insurers/health plans and providers first try to resolve any payment differences through negotiation on their own. If negotiation does not work, either party may request IDR process, which is a form of arbitration.

• Both the insurer/health plan and the provider will submit an offer along with any documentation supporting their position to the IDR entity, which will choose between them.
• In choosing either the insurer/health plan or provider offer, the IDR can consider certain factors such as the median contracted rate for the disputed items and services, the provider’s market share, the provider’s training and qualifications, and the severity of the patient’s condition.
• When making a decision, the IDR entity cannot consider government program rates (Medicare, Medicaid, Tricare), provider billed charges or usual and customary charges.

Is there a minimum threshold requirement to request dispute resolution?

There is no minimum claim threshold.