In December 2020, Congress passed sweeping legislation to protect patients from excessive surprise medical bills. The law, commonly referred to as the No Surprises Act (NSA), partially went into effect at the beginning of 2022 and is best known for prohibitions on certain billing practices. The law also establishes a federal independent dispute resolution (IDR) process to settle billing disputes between clinicians and insurers when no state law is in place to govern the dispute. These provisions are intended to take patients out of the middle of these disagreements.
The legislation includes other provisions intended to better inform patients about what costs to expect and their rights under the law. For instance, providers are expected to post disclosures in offices and on websites, provide patients with a notice of their rights under the law, and must offer good faith estimates (GFEs) regarding how much will be billed for a service.
Implementation of the NSA has been problematic thus far, with certain provisions implemented in a manner that seems inconsistent with the legislative language. This discrepancy has led to critical comments, complaints, and even lawsuits from stakeholders likely to be adversely affected by the law.
Furthermore, provisions of the law defer to the states when they have passed their own surprise billing legislation, meaning that surgeons may have slightly different processes for complying with the law or seeking dispute resolution over payments depending on where they practice. Several states are considering new legislation that would affect how the law is enforced in their jurisdiction.
This column is intended to help surgeons comply with the basic requirements of the law related to necessary disclosures, notices to patients, and production of GFEs. Although not exhaustive, it should guide surgeons seeking to ensure they are compliant with federal and state laws related to surprise billing. More information on the federal requirements can be found at the Centers for Medicare & Medicaid Services (CMS) No Surprises Act page at cms.gov/nosurprises.
How does the NSA affect billing practices for surgeons?
When patients receive care in a hospital or ambulatory surgical center (ASC) that is in-network for their insurer, surgeons and other clinicians who are out of network are prohibited from billing patients for additional amounts, except in certain circumstances.
For an out-of-network surgeon to bill a patient for amounts above what the insurer pays, the surgeon must first determine whether an in-network surgeon is available in the hospital to perform the operation. If no in-network surgeon is available, the attending is prohibited from billing the patient directly for additional amounts. If another surgeon is available, but the patient prefers to seek nonemergency care from the out-of-network surgeon at higher cost, he or she may do so provided specified notice and consent requirements are met.
Under the NSA, it is unlawful to balance bill patients for emergency care and, in some circumstances, poststabilization services are considered emergency care for this purpose, regardless of which hospital department provides them.
Detailed information from CMS on balance billing requirements under the law can be found at go.cms.gov/3tfXCKn.
What are the notice and consent requirements for out-of-network patients?
To bill an out-of-network patient directly for more than the insurer is willing to pay when the protections described earlier in this column apply, first it is necessary to notify patients of their rights and get approved consent to waive those rights. This notice and consent requirement is applicable only in nonemergency situations when other in-network clinicians are available and could provide care at the in-network rate. If the patient requires emergency care or no in-network provider is available, then consent cannot be obtained and additional billing is prohibited as noted previously.
CMS has provided a model notice and consent document with instructions as part of form CMS-10780, available at go.cms.gov/3u5Q387. If a surgeon is using the notice and consent mechanism, the notice must contain a GFE for the surgeon’s expected charges.
What recourse is available for surgeons who dispute insurance payments for out-of-network care?
The NSA generally defers to state law and regulations on balance billing and out-of-network payments from plans to providers. To the extent that a state law is applicable to the item or service involved in a potential dispute, including with respect to the insurance coverage and the nonparticipating provider, the dispute must be addressed in accordance with the state law. This may or may not involve a state-based dispute resolution process.
However, if no state law applies, then the federal government has established an IDR process. CMS has created a federal IDR portal to facilitate the processing and submission of information.*
Several rules apply regarding steps that must be taken before a request is initiated to advance the IDR process (including both parties submitting an offer), to receive a payment determination, and to reconcile payment discrepancies in accordance with the payment determination. Requests for dispute resolution are subject to the IDR entity’s fees.
What is the process for resolving payment disputes?
The patient’s insurance plan determines the initial payment either as a direct payment to the surgeon or a denial of payment. Denials of coverage are ineligible for dispute resolution under these new mechanisms. Payers now must issue this payment or denial within 30 days of the date the plan “receives the information necessary to decide a claim for payment for such services,” such as when the plan has determined it has received a clean claim.
If the surgeon is dissatisfied with the payment from the insurance plan, and state law does not govern the dispute, he or she may begin a 30-day open negotiation period. If an agreement cannot be reached within that period, either the plan or the surgeon has 4 business days to notify the other party and the Secretary of Health and Human Services that the IDR process is being initiated.
How does the IDR process work?
Once the process has begun, the insurance plan and practitioner have 3 days to jointly select a certified IDR entity. The parties can continue their negotiations during the IDR process, and if the parties come to an agreement on a payment amount before the IDR entity makes a payment determination, they will split the cost of compensating the IDR entity.
Within 10 days of selecting the IDR entity, both parties must submit their final offers, information that the IDR body has requested, and any details the parties believe are relevant. The IDR entity will weigh the offers submitted by both parties and the qualifying payment amount (QPA) for the same service in the same region. According to rulemaking, the IDR entity shall presume the QPA is the appropriate payment rate but may consider other information submitted by either party.†
The QPA for 2022 is the median of the contracted (in-network) rates as determined by all plans of a plan sponsor or all coverage offered by the health insurance issuer in the same “insurance market” as of January 31, 2019, increased by the consumer price index for urban consumers.
The IDR entity may also consider:
- Training, experience, quality, and outcome measurements
- The opposing parties’ market shares
- Acuity of patients and complexity of cases
- Teaching status, case mix, scope of services of the facility
- Good faith efforts by parties to contract with each other and contracting rate history from last 4 years
The party whose offer was not selected by the IDR entity must pay the cost of the IDR.
If the surgeon is expected to receive funds based on the IDR payment determination, payment for disputed services must be made to the surgeons within 30 days of resolution.
Can IDR claims be batched?
Batching of claims to proceed through the IDR process collectively is allowed for services furnished within a 30-day period and that meet the following criteria:
- Items and services were furnished by the same provider (either individual National Provider Identification number or group taxpayer identification number) or facility
- Items and services were provided to patients under the same plan
- Items and services were billed under the same service code
What is the IDR “90-day cooling off period”?
The party that initiated the IDR process cannot initiate a new IDR process with the same party and for the same services for 90 days. Once that 90-day period ends, the party may submit claims from that time frame to the IDR process.
What are the new disclosure requirements under the NSA?
Physicians, facilities, and other providers now must publicly display a disclosure of the new patient protections against surprise billing in their facilities and on their websites. The disclosure also should be in common areas, such as where patients schedule appointments, pay bills, or check in for care.
If you don’t have a publicly accessible office, these obligations likely will only be required of the hospital or ASC. If you have a public website, the disclosure should be displayed on or linked to a searchable home page.
- In addition, the regulations require the delivery of a one-page notice to patients, which must be:
- Provided in-person or through mail or email based on the patient’s preference
- Limited to one page but can be double-sided
- Typed using at least a 12-point font
The disclosure must include information on the restrictions on balance billing in certain circumstances, information on any state laws on surprise billing that may apply, and information on which state or federal agencies patients can contact if they think their rights under the NSA have been violated.
CMS has provided a model disclosure with instructions as part of form CMS-10780, which can be downloaded at go.cms.gov/3JizMDr.
Because it is necessary to include information on applicable state laws the model disclosure includes sections that should be filled in based on practice location. Your state also may develop its own model disclosure or model language to include in the federal disclosure. At press time, comprehensive information on applicable state laws was unavailable on the CMS website.
However, CMS has surveyed state surprise billing and out-of-network laws and opinion letters have been sent to each state outlining the federal government’s understanding of whether applicable state laws have been enacted and what aspects the state will be enforcing. These letters can be found at go.cms.gov/3u0qFRn. Because several states are considering new legislation or changes to existing laws, it is advisable to contact your state medical society for more information on your specific responsibilities. It also is important to remember that nothing prevents states from changing their laws in the future.
To prevent duplicative efforts and patient confusion, the agency has provided a pathway for surgeons and other providers to enter into written agreements with facilities whereby the facility would meet the public posting and one-page notice requirements. This flexibility is not available, however, for the requirement to post the disclosure on your website.
What are the new requirements for providing GFEs to patients?
In addition to prohibitions against balance billing, the NSA is intended to increase transparency so patients can avoid surprise bills. These new rules may require surgeons to produce GFEs for patients and prospective patients.
In the future surgeons also will be required to produce GFEs for insurers so that they can provide advanced explanation of benefits to covered individuals.
If a patient is uninsured or plans to pay for services out of pocket and schedules care or requests information on cost, the surgeon must provide a GFE within 3 business days if the care is scheduled to occur in at least 10 days. If the care is scheduled to occur within 3 to 9 days, the GFE must be provided within 1 business day. It is not necessary to provide a GFE to uninsured or self-pay individuals for urgent care or care that is scheduled to occur in fewer than 3 days.
The GFE is the responsibility of the provider that schedules the care, referred to in the law as the convening provider or convening facility. This party also is required to collect expected charge information from other clinicians and facilities expected to bill in conjunction with the primary service. For example, a surgeon scheduling care for an uninsured patient may be required to collect information on expected charges related to anesthesia, clinical labs, facilities, or other charges if they are customarily billed in conjunction with the procedure.
Patients also must receive a GFE as part of the notice and consent process if they are out-of-network to you but seeking care at a facility that is in-network. This GFE is slightly different in that you only need to include items and services that you intend to bill directly, not those related to the care you provide.
In the future you will need to provide GFEs to insured patients and insurers for the purpose of providing advance explanation of benefits to patients. However, CMS has elected to delay implementing this provision until future rulemaking, and it is unlikely that surgeons will need to provide GFEs to insurers before 2023. Surgeons still should be preparing to meet this requirement and should ensure that they are conforming with any applicable state laws.
The American College of Surgeons (ACS) has expressed concerns to the agencies implementing the NSA,‡ including the requirement to collect estimates from other providers and facilities on related services for uninsured or self-pay GFEs. The ACS has noted that it may be difficult or impossible for the surgeon to determine in advance who will be providing some services in the hospital on the day of surgery. Although surgeons should make every effort to include charges from all providers, CMS has indicated that for 2022 it will exercise discretion in enforcement in cases in which the convening provider cannot gather required information from providers of related services.
TABLE 1. Sample GFE
