Payment Determination Under the No Surprises Act
On January 1, 2022, the “No Surprises Act,” which Congress passed as part of the H.R. 133, Omnibus Appropriations and Emergency Coronavirus Relief Act, will go into effect protecting patients from unexpected medical bills when receiving out-of-network (OON) emergency care or when receiving non-emergency care at an in-network facility from an out-of-network provider, unless proper notice and consent procedures are followed for certain permitted services.
The Act prohibits providers from billing patients for more than the in-network cost-sharing obligations under their insurance plans in most scenarios. In essence, healthcare plans must manage OON claims as if the services were performed by an in-network provider at an in-network facility.
In addition, the No Surprises Act provides a framework for handling the resolution of payment disputes between health care providers and insurance companies. If an OON provider disagrees with the payment amount offered by a health plan for services rendered, it can initiate an independent dispute resolution (IDR) process following efforts to negotiate with the payor, when an all-payors database and State law do not apply to the services provided. The IDR entity must be independent, unbiased, certified and must adhere to the mandatory guidelines in making a payment determination based on a number of factors. One of the factors the arbitrator must consider is the qualifying payment amount.
What Is a Qualifying Payment Amount for the No Surprises Act?
The qualifying payment amount is generally the median of contracted rates for a specific service in the same geographic region within the same insurance market as of January 31, 2019. The rate will be adjusted per the Consumer Price Index for All Urban Consumers (CPI-U). Plans and payors will be subject to audit by regulators and subject to a complaint process by patients and/or their designated authorized representatives for compliance with the calculation of the qualifying payment amount.
An accurate calculation of this median in-network rate for the No Surprises Act is crucial as the starting point when determining the final payment for out-of-network services subject to the act. This amount serves as the baseline when calculating patient cost-sharing limits under the Act and patients will not be responsible for any additional cost sharing once the qualifying payment amount, the payor and provider can negotiate for a period of time in an effort to reach an agreement as to the payment amount. If those negotiations fail, then the provider may initiate arbitration using the IDR process under the No Surprises Act if State law does not apply. The public reporting of arbitration awards will be presented as a percentage of this figure.
Contact Us to Learn More
The law firm of Cohen Howard, LLC has specialized expertise in helping providers maximize payments for out-of-network services. Interim regulations were recently issued which further define the requirements under the No Surprises Act and we will continue to provide information as we review these and other regulations. If you have questions regarding the No Surprises Act, we are here to help with free consultations. Contact us today.