By: HUB’s EB Compliance Team

In connection with the release of the final Surprise Billing regulations, the Departments of Labor (“DOL”), Health and Human Services (“HHS”) and Treasury (collectively, the “Agencies”) released an extensive set of FAQs covering surprise billing and price transparency rules.  The FAQs are wide-ranging, but provide important clarifications for plan sponsors.

No-Network Plans

The FAQs confirm that the protections of the No Surprises Act apply to plans without a network (like reference-based pricing plans), at least for emergency and  air ambulance services.  In general, those protections prohibit non-network emergency providers and air ambulance services from balance billing participants and beneficiaries.  The FAQs clarify that all providers are essentially out of network for plans without a network, so the surprise billing restrictions apply to them.

However, there are separate protections for non-emergency services that are provided by a non-network provider at a network facility.  The most common example is when an anesthesiologist is out of network at an in-network hospital.  Under the No Surprises Act, that non-network provider cannot balance bill unless they first obtain informed consent and other restrictions are met.  However, since a no-network plan does not have any in-network facilities, these protections would not apply.

In determining what cost sharing can be applied under the No Surprises Act, a plan must apply its cost sharing rules to an objective amount. This amount is either: (1) the amount determined under an All-Payer Model Agreement, (2) if there is no applicable agreement, an amount determined under state law, or (3) if there’s no applicable state law, the lesser of the billed charge or the “qualifying payment amount” or QPA.  To calculate the QPA, most plans use the median rate with contracted providers.  However, plans with no network would not have such a rate.  The FAQs confirm that, under the regulations, no-network plans must calculate the QPA using an eligible database specified in the regulations. For reference-based pricing plans, employers will want to confirm that their TPA is making the calculation in accordance with these rules.

By contrast, for determining the “out of network rate” that the plan will pay providers, if an All-Payer Model Agreement or state law does not apply, then the plan would use the agreed-upon rate with the provider. This would either be an agreement that the plan reaches with the provider or the amount determined under Federal arbitration.

The FAQs also clarify that  reference-based pricing plans are restricted from limiting or excluding certain out-of-pocket spending from counting toward the out-of-pocket maximum (OOPM) under the plan. Specifically, if an individual is provided post-stabilization services after an emergency, any amount they spend out of pocket for those services should count toward the OOPM.  This means that if the provider does not accept the reference price for those services, then any amount the provider bills the individual should count toward the OOPM.

Closed Network/Panel Plans

Plans that do not provide any out-of-network coverage, like closed panel HMOs or exclusive provider network plans, are also subject to the No Surprises Act balance billing protections. This means if someone covered by one of these plans receives out-of-network services, the protections apply.

This may seem odd at first since in theory the plan would pay nothing for these services. However, the FAQs correctly point out that emergency services (which many closed plans do provide, even out of network) are subject to the balance billing protections. Additionally, under the No Surprises Act, a plan that covers any air ambulance services must cover those services by a non-participating provider as well, with certain restrictions. As a result, even “closed network” plans may still have some out-of-network claims.

Air Ambulance

Additionally, with regard to air ambulance services, the FAQs confirm:

  • A plan that does not provide non-emergency air ambulance services is not required to cover them as a result of No Surprises Act.
  • The protections related to air ambulance services do apply if the nonparticipating provider picks someone up outside the U.S. However, the Agencies acknowledge that the rules do not currently say how the plan should determine the QPA for pick-ups outside the U.S.  As a result, plans should use any reasonable method.

Price Transparency Clarifications

While this came after the deadline for posting the machine readable files (MRF) link, the Agencies did state in these FAQs that plans can contract with their TPAs to post the link to their MRFs on the TPA’s website.  This applies even if the employer has its own website.  This is good news since it means employers without a website do not need to create one, and even employers with a website do not have to post this link on their website.  This is a change from the prior understanding of these rules.  However, the employer must enter into a written agreement with the TPA to post the files. If the carrier or TPA fails to post them, the plan violates this requirement.

With regard to the self-service explanation of benefits, the FAQs confirm that, for plan years starting in 2023, this only needs to be available for 500 shoppable services.  The FAQs include a link to where the list of services will be updated quarterly.

Other Guidance

Finally, the FAQs provide the following clarifications and confirmations:

  • Services related to a behavioral health emergency are subject to the surprise billing protections of the No Surprises Act if they are provided in a hospital emergency department or freestanding emergency facility. This applies to facilities that serve these functions, even if the license issued to them does not use those terms.  In other words, it will be more of a facts and circumstances determination.
  • Notably, plans can require their TPAs or health plan carriers to post the No Surprises Act notice on their websites if the plan does not have its own public-facing website (which most do not). This applies even if the employer has a public facing website.  However, the employer must enter into a written agreement with the carrier or TPA to post the notice.  If the carrier or TPA fails to post the notice, the plan violates this requirement.  An updated model notice that should be used starting January 1, 2023 is available here (the prior version is only usable for 2022).
  • Plans are only required to include information on applicable state balance billing laws, not all state balance billing laws, in their No Surprises Act notice. While this is helpful, multistate plans will likely still have multiple state laws that could apply.
  • The FAQs provide special rules for calculating the QPA that apply to specialty physicians and self-insured plans that have multiple benefit package options (think PPO v. HDHP) that are offered by different TPAs.
  • They also provide additional details on the dispute resolution process between the health plan/TPA and the provider.

Conclusion

These FAQs provide significant clarifications on the surprise billing protections and price transparency rules under the No Surprises Act.  Additional guidance and model forms are linked to in the FAQs and at this CMS website.  While much of the mechanics of the surprise billing protections will be handled by carriers and TPAs, employers should be familiar with the relevant parts of these FAQs.  They may also want to consider moving any links to their machine readable files back onto the TPA’s website, if possible.

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

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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 or individual'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 or your organization’s particular needs.