Late last week, the Departments of Health and Human Services (HHS), Labor, and Treasury (collectively, the Departments), along with the Office of Personnel Management (OPM), released the “Requirements Related to Surprise Billing; Part I” interim final rule (IFR). The IFR implements key provisions of the No Surprise Act, which is intended to protect people from surprise bills and significant out-of-network cost-sharing for emergency services, services provided by out-of-network providers during an in-network facility visit, and air ambulance services.

The provisions of the IFR apply to group health plans, health insurance issuers offering group or individual health insurance coverage, and carriers in the Federal Employees Health Benefits Program (which we will refer to collectively as "health plans"), as well as certain health care facilities. The majority of the requirements in the IRF will be effective January 1, 2022. Below, we outline the major provisions of the IFR.

Emergency Services. Under the IFR, if any health plan provides emergency services, the emergency services must be covered without prior authorization, regardless of the network status of the emergency facility and without regard to any other term or condition of the plan or coverage (other than certain allowed exceptions). The IFR expands the definition of “emergency services” to include emergency services provided at an independent freestanding emergency department, which would pick up urgent care centers permitted by state licensing laws to provide emergency services. HHS, however, specifically requested comments on the inclusion of urgent care centers as providers of emergency services. The IFR also specifically clarifies that health plans cannot deny emergency services based solely on a diagnosis, which HHS notes is occurring with some regularity.

Post-Stabilization Services. The IFR also addresses post-stabilization care, clarifying that it is subject to the balance billing and out-of-network cost-sharing prohibitions of the IFR. Specifically, post-stabilization care provided at an out-of-network facility is subject to the cost-sharing protections of the IFR, unless the emergency physician or treating provider determines that the beneficiary is able to travel using nonmedical transportation to an available in-network facility located within “a reasonable travel distance,” taking into consideration the individual’s medical condition. The provider at the facility must also provide the appropriate notice to the beneficiary in a manner he or she can understand.

Non-Emergency Services at In-Network Healthcare Facilities. The IFR sets forth rules under which health care facilities are prohibited from charging out-of-network cost-sharing for non-emergency services obtained at an in-network facility by an out-of-network provider. This provision is intended to prevent situations where a beneficiary goes to an in-network health care facility, but a member of the care team (e.g., the anesthesiologist) is out-of-network. The IFR defines “health care facilities” to include hospitals, hospital outpatient departments, critical access hospitals, and ambulatory surgery centers. HHS specifically solicited comments on whether there are other facilities that should fall within the definition of “health care facilities.”

The IFR balance billing protections cover all services provided at the in-network facility, as well as “the furnishing of equipment and devices, telemedicine services, imaging services, laboratory services, and preoperative and postoperative services,” associated with the visit, regardless of whether the provider furnishing such items or services is at the facility. This statement captures items and services ordered at the in-network facility but potentially provided by out-of-network providers. For example, any lab service ordered by the in-network facility that may be sent to an off-site/out-of-network lab would be considered part of the in-network “visit” and would be covered by the balance billing protections of the IFR.

Out of Network Rate Paid to Facilities. Under the IFR, the total amount paid to the out-of-network facility is determined in the following manner:

  1. The amount allowed under an applicable All-Payer Model Agreement, which some states may have entered into with HHS;
  2. If no such All-Payer Model Agreement exists, an amount determined by state law;
  3. If (1) and (2) do not exist, an amount agreed upon by the health plan and the provider or facility; or
  4. If none of the above conditions apply, an amount is determined by an independent dispute resolution (IDR) entity. Of note, this IFR does not set forth the IDR process. Further rulemaking will establish the specifics of the IDR process.

Notice and Consent Exception to Balance Billing Prohibition. The IFR provides an exception to the balance billing and cost-sharing protections for certain post-stabilization services and non-emergency services, so long as the facility meets notice and consent requirements. To meet these requirements, the facility must provide written notice to the beneficiary in a form specified by HHS that includes a good faith estimate of the out-of-pocket costs. The notice must clearly state that the individual is not required to consent to receive such items or services from the nonparticipating provider or nonparticipating emergency facility. The facility must also receive consent, via a live or electronic signature, on an HHS-specified form.

Of note, this notice and consent exception does not apply to all situations. Specifically, the notice and consent exception does not apply to: (i) ancillary services, which include items and services related to emergency medicine, anesthesiology, pathology, radiology, and neonatology, whether provided by a physician or non-physician practitioner; (ii) items and services provided by assistant surgeons, hospitalists, and intensivists; (iii) diagnostic services, including radiology and laboratory services; and (iv) items and services provided by a nonparticipating provider, only if there is no participating provider who can furnish such item or service at such facility.

Comments on the IFR are due 60 days following the publication in the Federal Register. This is the first of several rules to implement the No Surprise Act. We will continue to track developments in this space, including subsequent rules.