Congressional sponsors of the federal No Surprises Act (NSA), effective January 1, 2022, while well-intentioned, never anticipated its repercussions. Equally astonished ruling agencies include the Departments of Labor, Treasury and Health and Human Services (“Departments”). Health care attorneys and hospital administrators were shocked the NSA passed with numerous ambiguities. Its implementation prompted hospital and provider associations, such as the American College of Emergency Physicians, American Medical Association and the American Hospital Association to file suits in Federal District Courts. Last August, the Departments reported an unanticipated 46,000 disputes initiated through the federal portal since April, 2022. That’s enough surprises for the most daring adventurer.

Let’s eliminate more unknowns by breaking down the No Surprises Act:

1. What is the No Surprises Act?

The NSA prohibits surprise out-of-network medical charges for services at in-network facilities, including emergency services and most out-of-network cost sharing charges. Providers and insurers must collaborate to determine how much doctors and hospitals should be paid—rather than shifting all of the outstanding financial burden to patients as “balanced billing.”

2. Who does the NSA apply to?

The NSA applies to hospitals, ambulatory surgical centers, rural health centers, federally qualified health centers and air ambulance providers but not to private dental practices. “Payers” (normally health insurance carriers) under the NSA include group and individual health plans but not standalone dental or vision plans.

3. How does the NSA affect providers and health systems?

Providers cannot charge insured patients more for out-of-network services than the median in-network contracted rate in the same geographic region (“qualifying payment amount” or QPA). Oddly, an exception to this rule is ground ambulance transport, commonly needed during emergencies.

For uninsured patients, providers must provide “good faith estimates,” when calculating medical bills. A good-faith estimate should include the expected cost for the primary service (i.e., surgery), in addition to expected costs for additional services provided during the point-of-care experience (i.e., anesthesia during the operation).

4. How are Insurers and Payers impacted by the NSA?

Payers must cover surprise billing at in-network rates, lessening the adverse impact of out-of-network balances. Payers must update provider directories, alerting members when a provider goes out-of-network while providing care.

5. How is the No Surprises Act enforced?

NSA violations may trigger penalties up to $10,000. Enforceability occurs at the federal or state level. States are primarily responsible for enforcement with providers and federal agencies provide backup. The federal government is responsible for enforcing the NSA with private health plans and payers. Federal agencies involved include the Departments of Labor, Treasury, Health and Human Services (“Departments”) or the Office of Personnel Management. However, states control enforcement for their state-regulated plans that regulate balance-billing.

6. What if providers and payers can’t agree on out-of-network fees?

Disputes are resolved through a federal independent dispute resolution (IDR) process overseen by third-party arbitrators. Patients are excluded from this process but payers often set benchmarks used for out-of-network fees.

7. How are disputes between patients and providers resolved?

Uninsured or self-pay patients can request a dispute resolution process if they are charged more than the good-faith estimate (“GFE”) they initially received, if the charges are at least $400. Patients may request a third-party arbitrator to oversee the resolution process.

8. What’s the latest news on the No Surprises Act?

On August 26, 2022, final NSA rules were published by the Departments, restructuring the IDR process and requiring payer “down coding” (meaning when a payer assigns a service or item a lower level than originally billed). Federal Register :: Requirements Related to Surprise Billing The recently published final rules go into effect on October 25, 2022, reducing the QPA’s role and impact on out-of-network payments as part of the IDR process. The IDR process allows other factors to be weighed with the QPA to determine the appropriate out-of-network charge. Guidance FAQs were also issued in August at aca-part-55.pdf (dol.gov).

Comments from the Texas Medical Association, American Medical Association, American Hospital Association, individual hospitals and outspoken providers never disputed the protections patients deserved; rather they seek to equalize provisions in the IDR process they believe unfairly favor payers when resolving out-of-network fee disputes.

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