By: HUB’s EB Compliance Team

Late last year, the Centers for Medicare and Medicaid Services (“CMS”) issued a memo on external review under the No Surprises Act. The memo only applies to health insurers and non-ERISA self-funded plans (like governmental plans or church plans that have not elected to be covered by ERISA). 

Background

As part of the Affordable Care Act, all group health plans (other than grandfathered plans) were required to offer external review for certain types of claims. External review is another level of review after internal appeals are exhausted. The external reviewer’s decision is binding on the plan and the participant. Self-funded plans that are not subject to ERISA and health insurance carriers were required to use a state external review procedure (by contrast, self-funded ERISA plans follow a federal procedure).

The No Surprises Act, enacted as part of the Consolidated Appropriations Act, 2021, made two significant expansions to the external review process for all plans. First, it made surprise billing/No Surprises Act claims eligible for external review. Second, it made grandfathered plans subject to external review, but only for surprise billing/No Surprises Act claims. Grandfathered plans are still not required to offer external review to other claims.

Examples of surprise billing/No Surprises Act claims that could be subject to external review are:

  • Patient cost-sharing and surprise billing for emergency services;
  • Patient cost-sharing and surprise billing protections related to care provided by nonparticipating providers at participating facilities;
  • Whether patients are in a condition to receive notice and provide informed consent to waive NSA protections; and
  • Whether a claim for care received is coded correctly and accurately reflects the treatments received, and the associated No Surprises Act protections related to patient cost-sharing and surprise billing.

These examples are more fleshed out in Part II o the Surprise Billing regulations HUB discussed here.

State of Affairs

However, some states have notified CMS that their external review processes are not currently able to handle surprise billing/No Surprises Act claims. The CMS memo directs insurers and non-ERISA self-funded plans to take one of two routes in the meantime.

One option is to use the federal process.  States should be referring any surprise billing/No Surprises Act external review requests to a designated federal contractor, MAXIMUS, identified in the guidance starting January 1, 2022.

Alternatively, a non-ERISA self-funded health plan or insurer can contract with an accredited independent review organization (IRO) in accordance with applicable federal external review rules that apply to ERISA Plans. The memo mentions that this may require modifying existing IRO contracts and updating plan documents or benefit determination notices to address surprise billing matters. IROs should be able to conduct external reviews of surprise billing/No Surprises Act matters, but if they cannot, use of the HHS-administered process described above is encouraged.

Regardless of which process a non-ERISA plan or insurer is using in the meantime, it should revert back to the state process once the state external review process is prepared to handle surprise billing/No Surprises Act matters.

Takeaways

While most of the administration of this will likely be handled by insurers or third-party administrators, employers should be aware of these changes.  Updates to employee communications to reflect the revised external review requirements may be necessary.

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER

Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only, and is not intended to constitute legal or tax advice as to an organization’s specific circumstances. It is based on Hub International's understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect and Hub International does not have an obligation to update this information. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your organization’s particular needs.