SURPRISE NO MORE

A MATRIX Minute by MATRIX Group Benefits, LLC

On July 1, 2021, the Department of Health and Human Services (HHS), the Department of Labor, and the Department of the Treasury (collectively, the Departments), along with the Office of Personnel Management (OPM) released an interim final rule with comment period (IFC), entitled “Requirements Related to Surprise Billing; Part I.” This rule, related to Title I (the No Surprises Act) of Division BB of the Consolidated Appropriations Act 2021, establishes new protections from surprise billing and excessive cost-sharing for consumers receiving health care items and services. This IFC implements many of the law’s requirements for group health plans, health insurance issuers, carriers under the Federal Employees Health Benefits (FEHB) Program, health care providers and facilities, and air ambulance service providers. 

This IFC protects individuals from surprise medical bills for emergency services, air ambulance services provided by out-of-network providers, and non-emergency services provided by out-of-network providers at in-network facilities in certain circumstances. 

If a plan or coverage provides or covers any benefits for emergency services, this IFC requires emergency services to be covered:

• Without any prior authorization (i.e., approval beforehand). 
• Regardless of whether the provider is an in-network provider or an in-network emergency facility.
• Regardless of any other term or condition of the plan or coverage other than the exclusion or coordination of benefits, or a permitted affiliation or waiting period. 

Emergency services include certain services in an emergency department of a hospital or an independent freestanding emergency department, as well as post-stabilization services in certain instances.

This IFC also limits cost sharing for out-of-network services subject to these protections to no higher than in-network levels, requires such cost sharing to count toward any in-network deductibles and out-of-pocket maximums, and prohibits balance billing. These limitations apply to out-of-network emergency services, air ambulance services furnished by out-of-network providers, and certain non-emergency services furnished by out-of-network providers at certain in-network facilities, including hospitals and ambulatory surgical centers.

This IFC specifies that consumer cost-sharing amounts for emergency services provided by out-of-network emergency facilities and out-of-network providers, and certain non-emergency services furnished by out-of-network providers at certain in-network facilities, must be calculated based on one of the following amounts: 

• An amount determined by an applicable All-Payer Model Agreement under section 1115A of the Social Security Act.
• If there is no such applicable All-Payer Model Agreement, an amount determined under a specified state law.
• If neither of the above apply, the lesser amount of either the billed charge or the qualifying payment amount, which is generally the plan’s or issuer’s median contracted rate. 

Similarly, cost-sharing amounts for air ambulance services provided by out-of-network providers must be calculated using the lesser of the billed charge or the plan’s or issuer’s qualifying payment amount, and the cost sharing requirement must be the same as if services were provided by an in-network air ambulance provider.

Under this IFC, the total amount to be paid to the provider or facility, including any cost sharing, is based on:

• An amount determined by an applicable All-Payer Model Agreement under section 1115A of the Social Security Act.
• If there is no such applicable All-Payer Model Agreement, an amount determined by a specified state law.
• If there is no such applicable All-Payer Model Agreement or specified state law, an amount agreed upon by the plan or issuer and the provider or facility.
• If none of the three conditions above apply, an amount determined by an independent dispute resolution (IDR) entity.

Plan Sponsors and their advisors should monitor the developments of the IFC and be prepared to amend plans for the plan year beginning January 1, 2022 based on the final rules when they are released.