On September 30, 2021, the Centers for Medicare and Medicaid Services (CMS) issued an interim final rule (IFR) to address large out-of-pocket costs to consumers from “surprise billing.” This IFR is the second set of rulemaking from the Biden Administration that implements the No Surprises Act, signed into law December 2020. This IFR outlines the federal independent dispute resolution process, good faith estimate requirements for uninsured (or self-pay) individuals, patient-provider dispute resolution processes for uninsured (or self-pay) individuals, and external review provisions of the No Surprises Act.
The rule outlines the long-anticipated federal independent resolution process, which allows plans and insurers to determine out of network (OON) rates for emergency services after an unsuccessful open negotiation.
While the IFR was released in conjunction with the Department of Labor (DOL, Treasury, and Office of Personnel Management (OPM), the CMS rules only apply to selected dispute resolution SDR) entities, providers, facilities, and providers of air ambulance services as outlined in the IFR.
“No one should have to go bankrupt over a surprise medical bill,” said HHS Secretary Xavier Becerra. “With today’s rule, we continue to deliver on President Biden’s Competition Executive Order by promoting price transparency and exposing inflated health care costs. Our goal is simple: giving Americans a better deal from a more competitive health care system.”
These regulations – along with regulations announced in the July 13, 2021, rule “Requirements Related to Surprise Billing; Part I,” which restricts excessive out-of-pocket costs to consumers that result from surprise and balance billing – are applicable as of January 1, 2022.
Notable IFR Provisions
Independent Dispute Resolution
One of the notable provisions in the IFR covers independent dispute resolution and describes the process that applies only to OON emergency air ambulance services and non-emergency OON providers at in-network facilities after open negotiations for rate setting has failed.
The IDR process will begin if negotiations fail following a 30-day open negotiation period to determine a payment rate. At the close of the 30-day negotiation period, the parties will have up to four business days to start the IDR process and an additional three days to agree upon an independent resolution entity. If negotiating parties cannot agree on an independent negotiator, the Departments will have six days after the start of the IDR to choose a negotiator for the parties. Once the negotiator is selected, the parties must submit their payment offers to the dispute negotiator within ten days. The dispute resolution entity then has 30 days after its initial selection to make a payment determination. The disputing parties must pay the applicable balance within 30 days of the payment determination.
Resolution entities must initially operate under the assumption that the qualified payment amount (QPA) — the plan or issuer’s average rate for the service — is the correct OON amount. However, this is subject to change if a party submits additional information that proves a substantial difference between the service provided and the QPA.
Good Faith Estimates
This IFR requires that providers and facilities ask about the health insurance status of an individual when scheduling an item or service. For individuals who are uninsured or opt to be self-pay, providers and facilities are required to issue a good faith estimate of anticipated charges for services rendered.
The IFR outlines what a good faith estimate entails and states that all expected charges for items or services that are provided in conjunction with a primary item or service must be included in the estimate.
External Review
This IFR also expands the scope of the external review process by making eligible for review coverage decisions that involve whether a health plan is complying with the surprise billing and cost-sharing protections under the No Surprises Act protections.
Reaction
The American Medical Association (AMA) is not pleased with the IFR and is asking the Biden Administration to delay its implementation to allow for a full evaluation of policies contained in the IFR, “The interim final regulation issued … to implement the No Surprises Act ignores congressional intent and flies in the face of the Biden Administration’s stated concerns about consolidation in the health care marketplace. It disregards the insurance industry’s role in creating the problem of surprise billing at the expense of independent physician practices whose ability to negotiate provider network contracts continues to erode,” said AMA President Gerald A. Harmon, M.D.
What’s Next?
Comments on the IFR must be submitted no later than 5 PM on December 6, 2021. CMS will then review the comments and move to finalize the rule, with or without modifications. If CMS finds that no modifications are necessary, it will issue a notice indicating the IFR is final as published.