HHS Proposed Rule: Updates on Surprise Billing Regulations and Requirements

On September 30, 2021, the Departments of Health and Human Services, Labor, and the Treasury (the Departments), along with the Office of Personnel Management (OPM), issued a second interim final rule with comment period, “Requirements Related to Surprise Billing; Part II,” to protect consumers from surprise medical bills under the No Surprises Act. This rule provides additional consumer protections, including the following:

• A process that takes consumers out of the middle of a payment dispute between providers and health plans
• Requirements for health care cost estimates for uninsured (or self-pay, meaning you have coverage but choose not to have your care billed to your health plan) individuals
• A payment dispute resolution process for uninsured (or self-pay) individuals
• Expanded rights to external review (what individuals with job-based or individual health plans can use to dispute denied claims, as described below)

Along with the release of this second interim final rule, CMS has launced a website (https://www.cms.gov/nosurprises) dedicated to the No Surprises Act. Additional information will be posted on the website over the next several months to highlight different provisions as they become more relevant to stakeholders and interested consumers.

This is the third rule the Departments and OPM have issued to implement the No Surprises Act. Earlier this month, they issued a proposed rule to help collect data on the air ambulance provider industry.

Most group health plans and health insurance issuers that offer group or individual health insurance coverage have a network of providers and health care facilities (in-network providers) that agree to accept a specific payment amount for their services. Providers/facilities that are not part of the network for a plan or issuer network (out-of-network providers) usually charge higher amounts than the contracted rates the plans/issuers pay to in-network providers.

When a person with health insurance coverage gets care from an out-of-network provider, their health plan usually doesn’t cover the entire out-of-network cost, leaving that person with higher costs than if they had been seen by an in-network provider. In many cases, the out-of-network provider can bill the person for the difference between the billed charge and the amount paid by their health plan, unless prohibited by state law. This is known as “balance billing.” An unexpected balance bill is called a surprise bill.

Surprise bills and balance bills affect many Americans, particularly when people with health coverage unknowingly get medical care from a provider or facility outside their health plan’s network. This situation is common in emergency situations, when people usually go (or are taken) to the nearest emergency department without considering their health plan’s network. It can also happen when people with health coverage receive care from an out-of-network provider at an in-network facility.

Rules related to the No Surprises Act include important protections for the majority of consumers who do not receive health coverage through federal programs. The rules don’t apply to people with coverage through programs like Medicare, Medicaid, Indian Health Service, Veterans Affairs Health Care, or TRICARE, since each of these programs already has other protections against high medical bills. The rules also include key updates for people who are uninsured (or self-pay) for their care.

The rule also details how providers, facilities, providers of air ambulance services, and plans and issuers can negotiate payment for out-of-network bills and can access the federal arbitration process when these organizations can’t agree on payment arrangements, taking consumers out of the middle. The rule also addresses additional protections for uninsured (or self-pay) consumers who are seeking care, and steps they can take if a medical bill is much higher than expected.

The rule also outlines a process for resolving payment disputes between an out-of-network provider or facility and a health plan for how much the out-of-network provider or facility will be paid for the services when surprise billing protections apply. When a claim is made for an item or service that is covered by surprise billing protections and the health plan denies payment or pays less than anticipated, either the health plan or the provider or facility can choose to start an open negotiation period that lasts 30 business days. If the health plan or the provider/facility cannot agree on a payment rate, either can begin the federal independent dispute resolution process to resolve the payment disagreement.

The rule also protects uninsured (or self-pay) individuals from unexpected medical bills. Starting January 1, 2022, a provider or facility has to give an uninsured (or self-pay) individual a good faith estimate of expected charges after an item or service is scheduled, or upon request.

The good faith estimate will include expected charges for the primary item or service the consumer receives, as well as for any other items or services that would reasonably be expected to be provided as part of the same scheduled or requested items/services.

For example, for a surgical procedure, the estimate might include the cost of the surgery, any laboratory work or tests, and the anesthesia that might be used during the operation. If an item/service is something that isn’t scheduled separately from the surgery itself, it will generally be included in the good faith estimate. Other items/services related to the surgery that might be scheduled separately, like pre-

surgery appointments or physical therapy in the weeks after the surgery, won’t be included in the good faith estimate.

To make this good faith estimate as useful for uninsured (or self-pay) individuals as possible, providers must:

• Provide a good faith estimate to an uninsured (or self-pay) individual:
• Within 1 business day after scheduling (this timeline applies when your primary item or service is scheduled at least 3 business days before the day you would receive it) or no later than 3 business days after scheduling (this timeline applies when your primary item or service is scheduled at least 10 business days before you would receive it), depending on scheduling; or
• Within 3 business days after an uninsured (or self-pay) consumer requests a good faith estimate.
• Include in the good faith estimate an itemized list of each item or service, grouped by each provider or facility offering care. Each item or service has to have specific details and the expected charge.
• Provide a paper or electronic copy of the good faith estimate, even if the provider also provides the good faith estimate information to the consumer over the phone or verbally in-person.
• Provide the good faith estimate using clear and understandable language.

Additionally, this rule lays out a new dispute resolution process for an uninsured (or self-pay) individual who receives a bill for an item/service that’s substantially greater than the expected charges in the good faith estimate. Beginning January 1, 2022, under this process, a consumer can:

• Begin dispute resolution between the patient and the provider when the actual billed charges for a particular provider/facility are at least $400 morethan the good faith estimate you were given. Patients have 120 calendar days from the day they get the bill to begin the process.
• Request that a third-party dispute resolution organization review the good faith estimate, bill, and information submitted by the patient and provider/facility. The third-party dispute resolution organization will use this information to determine whether the additional charges that were billed are allowed, or whether the provider can charge only what was in the good faith estimate or some other amount lower than the bill.

To offset some of the costs of operating the dispute resolution process while keeping it accessible, HHS will charge consumers an administrative fee of $25 in 2022. However, if the resolution ends in the consumer’s favor, this fee will be credited back on their bill by the provider/facility.

This rule expands the scope of the external review process, which is what individuals with group or individual health coverage can use to appeal a payment for a health care item/service that was denied by their health plan due to an item/service not being covered, restrictions on coverage, or the item/service not being considered medically necessary by the health plan. This rule specifically says that coverage decisions that involve whether a health plan is complying with the surprise billing and cost-sharing protections under the No Surprises Act protections are eligible for external review.

Consumer protections in the rule will take effect beginning on January 1, 2022.

Comments on “Requirements Related to Surprise Billing; Part II” are due by 5pm ET on December 6, 2021.

More information and a link to the full rule can be found in the general fact sheet.