An ongoing commentary from Healthlink Dimensions
- Announced by HHS, IRS, and Dept of Labor: July 1, 2021
- Published in the Federal Register: July 13, 2021
- Federal Register: Requirements Related to Surprise Billing; Part I
The July 1st interim final rule is the first set of rules released jointly by the departments responsible for implementation of the No Surprises Act, part of the Consolidated Appropriations Act of 2021.
This interim final rule provides details for the following sections of the No Surprises Act:
- Member cost sharing (Section 102)
- Qualified Payment Amount (QPA) calculation (Section 102)
- Determining the out of network payment amount vs. the “recognized amount” or QPA (Section 103)
- Specifies when regulations apply to air ambulance and when they don’t within the sections addressed by interim rule (multiple sections)
- Required notice from out-of-network providers regarding NSA rights and rules regarding balance billing (Section 104)
- Patient rights and recourse to dispute an out of network balance bill (Section 110)
The first major set of rules focuses on definitions of which providers and consumers are affected, how to calculate market rates when a contract rate is not in place and details the patient and member protections covered by the law.
QPA Calculation Method
Of note, the Qualified Payment Amount (QPA) takes up a large portion of the rules. When sufficient data exists, insurers will calculate the out of network allowed rate using these factors:
- Median contracted rate for 3 or more contracted providers as of Jan 31, 2019
- For same or similar service (CPT code, DRG code, etc.)
- Provided by same or similar specialty
- In the same geographic region
- Within an MSA where one exists
- All rural areas combined in a state outside of the MSAs
- Increased for inflation (CPI-U)
- By insurance market
- Individual market
- Group market
- TPA collective self-insured group market rather than each self-insured creating their own rate
The interim final rule also identifies several exceptions and how to address them when data is not sufficient to help determine the Qualified Payment Amount. By using the median contracted rate, any high-paid or low-paid outliers will not generally influence the QPA. The count of contracts is done at the Tax ID or clinic corporate level so the median will typically fall where the majority of providers are contracted.
Starting January 1, 2022, payers must notify out of network providers when they use the QPA rate as the initial payment and providers are prohibited from balance billing their patients above this amount.
Qualifying Payment Amount used for cost sharing
The QPA also acts as the key amount used by insurance companies to determine their member’s share of the cost such as deductible, coinsurance, or copays. Key to the law and the rules are that no matter what the outcome of any negotiation or dispute between the payer and provider, the QPA or “initial payment” amount used for benefit calculation will not change for the patient. In this way patients/members are saved from the back and forth between their insurance company and their provider. Patients will know what they owe and what their insurance company paid.
Definitions of Services Covered by No Surprises
1) Emergency services were defined as all services provided by all providers while a member is within:
- Hospital Emergency Department
- Free-standing Emergency Department
Urgent care centers are excluded from these definitions for now
One other key change in the interim final rule is that emergency services can no longer be denied retroactively as unnecessary based on the ICD-10 diagnosis codes determined by the coding staff after the visit occurs. The law defers to the attending providers on whether the service required emergency room care or not.
2) Stabilization and post-stabilization services before patient is deemed able to transfer to an in-network provider for continued care is also covered by No Surprises Act. Again, the law specified that the attending physician was the most qualified to determine this rather than any medical necessity review by the payers or 3rd parties.
3) Out-of-network providers who service patients at in-network hospitals or other facilities are included in No Surprises Act. The rules give details regarding which facilities are included in this definition and that even services performed off-site for the patient are included in the protections of the No Surprises Act.
The interim final rule also outlined a rough timeline of when other parts of the law would receive more rules and guidance. The timeline is as follows: