After two years of negotiations Congress has enacted legislation to protect patients from certain surprise medical bills as part of Consolidated Appropriations Act, 2021.   The No Surprises Act (the “Act”) amends the Public Health Services Act and will take effect on January 1, 2022.  While several states have passed surprise billing protections in recent years that addressed fully-insured plans, this legislation will extend to self-funded plans.  The Act will protect patients when they receive out-of-network emergency care (including independent freestanding emergency departments), out-of-network physician services while at an in-network facility, and air ambulance services.  Excluded from the Act are ground ambulance rides but it does create an advisory committee to study consumer protections related to ground ambulance rides.

The Act intends to protect patients from surprise bills, limiting patient responsibility to what they would otherwise be responsible for if they had received care from an in-network provider.  The Act also requires uninsured individuals to be provided with a good faith estimate of costs before they receive care and insurers to provide advanced explanations of benefits to enrollees indicating whether the provider or facility is a participating provider and their estimated costs.  The Act also requires the implementation of a patient-provider dispute resolution process when uninsured individuals receive charges substantially in excess of a good faith estimate.

When there is a payment dispute for out-of-network care, insurers and providers have a thirty-day open negotiation period to negotiate from the day the provider or facility receives an initial payment or notice of denial of payment.  When this negotiation is unsuccessful, the parties have four days to request the independent dispute resolution (“IDR”) process.  The Secretary of the US Department of Health and Human Services, jointly with the Secretary of Labor and Secretary of Treasury, must establish through notice-and-comment rulemaking within one year of enactment, one IDR process.

Earlier compromise legislation included a benchmark standard, but the Act instead implements an IDR process to determine payment disputes between insurers and providers.  Each party will submit a payment amount and the IDR entity will select the correct amount ( often referred to as “baseball style arbitration”).  Providers may only request IDR once every ninety days, and the IDR entity is prohibited from considering usual and customary charges, the provider or facility charges, or Medicare, Medicaid, CHIP, or TRICARE rates.  IDR entities are required to consider the prevailing in-network negotiated payment rates.  The IDR entities decision is binding upon the parties and is not subject to judicial review.  The Act also permits providers and insurers to submit multiple cases together for IDR.  The party whose is offer is not chosen is responsible for paying the charges of the IDR entity.  Finally, the law does not preempt existing state law that addresses surprise billing for fully insured plans.  If the parties reach a settlement prior to the IDR determination, each party shall pay half of the IDR fees (unless the parties agree otherwise).

The Act also creates provider directory verification requirements for health insurers.  The provision requires verification of a database on a public website of the health plan or issuer that contains each health care provider and health care facility that the plan or issuer has a direct or indirect contractual relationship to furnish items and services with no less frequently than once every 90 days.  In addition, the website must contain provider directory information for each provider and facility, which includes for each provider or facility the: name, address, specialty, telephone number, and digital contact information.

Norton Rose Fulbright attorneys are continuing to review the Continuing Appropriations Act, 2021 and consider its impact on the health care industry.  Please contact members of the Norton Rose Fulbright healthcare team if we can assist with your evaluation of the Act and its impact on your operations.