The No Surprises Act (Act), which establishes protections for health plan participants from surprise medical billing, was passed in late 2020 as part of the 2021 Consolidated Appropriations Act. On October 7, 2021, the Departments of Labor, the Treasury, and Health and Human Services (collectively, Departments) issued Interim Final Rules implementing certain provisions of the Act. On February 23, 2022, and then again on July 26, 2022, the District Court for the Eastern District of Texas vacated several key provisions of the Interim Final Rules. Following the February 23 ruling, the Departments issued a Memorandum Regarding Continuing Surprise Billing Protections for Consumers, stating the Departments’ intent to act “promptly” to release revised guidance under the Act.

Making good on that intent, on August 19, the Departments released the Requirements Related to Surprise Billing: Final Rules (Final Rules) and simultaneously issued guidance in the form of Frequently Asked Questions (FAQs) to clarify the Final Rules.

The FAQs cover a range of topics, some of which are summarized below:

Applicability to No-Network Plans

The Act’s protections against surprise billing generally apply when a participant receives emergency or air ambulance services from an out-of-network provider or certain non-emergency services from an out-of-network provider at an in-network facility. The FAQs clarify that because all emergency and air ambulance services provided under a no-network plan are necessarily out-of-network services, the Act applies to all emergency and air ambulance services provided under a no-network plan.

The protections applicable to non-emergency services from an out-of-network provider at an in-network facility will never be triggered because a no-network plan does not have in-network facilities.

Applicability to Closed-Network Plans

The Departments clarify that the Act’s requirements apply to plans that do not cover out-of-network services. Therefore, a closed-network plan may be required to pay for out-of-network emergency or air ambulance services.

Emergency Services Furnished in a Behavioral Health Crisis Facility

The Departments recognize that individuals receiving care for a behavioral health crisis may not be best served in a traditional hospital setting. Thus, the FAQs provide that the Act’s requirements apply to coverage for emergency services provided in response to a behavioral health crisis in an out-of-network facility that is licensed by the state to provide services in response to a behavioral health crisis, whether or not the facility is licensed as an emergency department or facility or whether the facility’s license includes the term “emergency services.”

Methodology for Determination of QPA

Generally, the qualifying payment amount (QPA) is the median contracted rate for a service or item. The QPA may determine the applicable rate for cost-sharing. In addition, the QPA will help determine the appropriate provider payment rate during the Federal IDR Process. The FAQs clarify that plans that vary their contracted rates based on specialty must calculate the QPA separately for each specialty if there is a “material difference” between the median contracted rates for a service code between providers of different specialties. Whether there is a “material difference” is a facts and circumstances determination.

This determination methodology prevents plans from calculating contracted rates in a way that artificially lowers the values. For example, suppose a plan pays a higher contracted rate for an anesthesiologist to provide anesthesia and a lower contracted rate for all other providers to provide anesthesia (because other providers rarely provide anesthesia). In that case, the plan must only use the anesthesiologist contracted rate to determine the QPA for an out-of-network anesthesiologist providing anesthesia.

Plans have 90 days to come into compliance with this requirement.

Federal IDR Process

The Federal IDR Process establishes an arbitration process for plans and providers that cannot agree on pricing for out-of-network emergency and air ambulance services and for certain out-of-network non-emergency services rendered at in-network facilities. The Interim Final Rules used the QPA as the primary factor in the arbitrator’s decision under the Federal IDR Process. The District Court for the Eastern District of Texas struck down the presumption in favor of the QPA in the Interim Final Rules. Upon revision, the Final Rules specify that arbitrators should “select the offer that best represents the value of the item or service under dispute after considering the QPA and all permissible information submitted by the parties.”

The FAQs further expand on the Federal IDR Process, including requirements for initial payment amounts, deadlines for initial payments or denial notices, and other notification requirements.

Transparency in Coverage Machine-Readable Files

The Transparency in Coverage Rules (TiC Rules), issued before the Act, require plans to publicly post machine-readable files, including negotiated and historical out-of-network rates for specific services and procedures effective as of July 1, 2022. The Departments included TiC guidance in the FAQs.

The FAQs clarify that the TiC Rules do not require a plan without a public website to create a website to post the information required by the TiC Rules.

In addition, the TiC Rules do not require an employer to post a link to the machine-readable files on its client-facing public website. Instead, a plan may satisfy the TiC posting requirement by entering into a written agreement under which a service provider posts the machine-readable files on its public website on behalf of the plan. The plan will remain liable if the service provider does not fulfill the posting requirement.