Health Insurance
HHS Gives Guidance to Providers on the No Surprises Act in Interim Final Rule
Overview On July 1, 2021, the Department of Health and Human Services (HHS), along with other federal agencies, released an interim final rule implementing certain provisions of the No Surprises Act.[1] The No Surprises Act aims to protect health plan participants and beneficiaries from surprise medical bills when they receive items and services in certain settings from out-of-network providers and health care facilities. The rule will be enforced beginning January 1, 2022. The rule includes requirements applicable to: (1) group health plans and health insurance issuers that offer group or individual health insurance coverage; (2) certain types of health care providers; and (3) health benefit plans offered by carriers under the Federal Employees Health Benefits Act. This article will focus on provider requirements under the new rule. Provider Requirements Under the Interim Final Rule Under the No Surprises Act, nonparticipating providers, facilities, and air ambulance providers are prohibited from balance billing individuals. This means that the nonparticipating provider, facility, or air ambulance provider may not bill an individual for a dollar amount that exceeds the individual’s in-network cost-sharing obligations. A nonparticipating provider is any physician or other health care provider acting within the scope of their licensure under applicable state law and who does not have a contractual relationship with the health plan or health insurance issuer. The balance billing prohibition applies to the following health care services: (1) emergency services provided by a nonparticipating provider or nonparticipating emergency facility; (2) non-emergency services provided by a nonparticipating provider at a participating health care facility; and (3) air ambulance services furnished by a nonparticipating air ambulance service provider. For purposes of the balance billing prohibition for non-emergency services provided by a nonparticipating provider at a participating health facility, a participating health care facility is a hospital, hospital outpatient department, critical access hospital or ambulatory surgical center that has a direct or indirect contractual relationship with the health plan or health insurance issuer with respect to the item or service furnished. Any participants, beneficiaries, or enrollees in a group health plan or group or individual health insurance coverage offered by an issuer, including Federal Employees Health Benefits beneficiaries, are covered by the rule’s protections. Disclosure Requirements The No Surprises Act requires providers, facilities, plans and issuers to disclose the patient protections against balance billing to individuals. Per the interim final rule, the disclosure must: (1) contain clear and understandable language of the protections, including how to contact federal and state agencies for suspected violations; (2) be provided within the required time frame, and (3) comply with federal civil rights laws regarding communication and language barriers. Air ambulance service providers are exempt from the disclosure requirements. For providers and facilities, the deadline for providing disclosure depends on the circumstances. If an appointment is scheduled at least 72 hours before the date of the appointment, then disclosure must be made no later than 72 hours prior to the date of appointment. If an appointment is schedule within 72 hours of the appointment, disclosure must be provided on the same date as, and at least three hours prior to, the appointment. Disclosure must be provided via three channels: Public location. Providers must post the required disclosure in a prominent, central location where services are provided, such as near a scheduling or check-in desk. Public website. The public website disclosure must be searchable and accessible free of charge and without any login or personal information inputting requirements. Providers and facilities that do not have a website are exempt from this requirement. One-page notice. Individuals must be provided with a one-page notice of the disclosure. The notice must have a minimum of 12-point font, and it may be double-sided. Provider Exception To prevent duplicate disclosure notices to individuals, HHS created an exception to the disclosure requirement for providers. If a provider furnishes items or services covered by the plan or coverage at a facility, including hospital emergency departments and independent freestanding emergency departments, it satisfies the disclosure requirements if the facility agrees in writing to provide the required disclosure on behalf of the provider. This is available regardless of whether the provider and facility bill jointly or separately. If the facility fails to provide proper disclosure under the written agreement, the facility, not the provider, is in violation of the rule. Notice and Consent Exception Under the No Surprises Act, the prohibition on balance billing does not apply if notice is given to an individual, and the individual consents to waiving balance billing protections with respect to the providers and/or facilities named in the notice. What to Include Providers and facilities are required to use the standard notice and consent forms that will be issued by HHS for this exception to apply. These forms must be tailored to include certain specific information, including (1) the out-of-network providers and/or facilities to which it applies, and (2) a good-faith cost estimate for the applicable items or services. The notice, and subsequent consent, will only be valid for those providers and/or facilities named in the notice. How to Provide Notice The notice and consent documents must be given to the individual together, and they must be physically separate from, and not attached or incorporated into, any other documents. The documents may be given electronically if the individual so chooses. Additional Details Like the disclosure requirements, the notice and consent forms must meet language access and timing requirements specified by the rule. The individual may revoke their consent at any time prior to the furnishing of the relevant items or services by notifying the provider/facility in writing. Providers and facilities may refuse to treat individuals who do not consent, subject to other state and federal laws. Exceptions to the Exception In the following circumstances, the notice and consent exception is unavailable, and the balance billing prohibition always applies: Where notice is received by the individual, but consent is either not given or is revoked; Emergency services; Post-stabilization services, unless certain conditions are met; Air ambulance services; Items or services furnished as a result of unforeseen, urgent medical needs that arise at a time an item or service is furnished for which notice and consent was received; and Ancillary services, such as anesthesiology, pathology, radiology, and neonatology, whether provided by a physician or a non-physician practitioner. Penalties HHS may impose civil monetary penalties of up to $10,000 per violation on providers and facilities that violate the balance billing prohibition requirements. However, these penalties may be waived if a provider or facility unknowingly violates the statute and should not have reasonably known that it did so, and within 30 days withdraws the bill in violation and reimburses the plan or individual for the difference between the amount billed and the correct billable amount, plus interest. Conclusion The final interim rule makes clear that beginning January 1, 2022, providers and facilities must address the disclosure and balance billing prohibitions in the No Surprises Act. While this article is not meant to encompass all of the details, it offers providers an overview of what these expectations are and what measures must be taken to comply with the rule. If you have questions regarding the No Surprises Act, please contact the authors or any member of Dorsey’s Health Transactions and Regulations practice group. [1] Office of Personnel Mgmt. et al., Requirements Related to Surprise Billing; Part I, at *2 (2021). Summer Associate Hannah McCallum provided substantial assistance researching and drafting this article.
August 2, 2021
by Ross C. D'Emanuele
Health Insurance
The “War” Between Out-of-Network Providers and Insurers Spreads Into COVID-19 Territory
ERISA litigators know that a war has been raging between “out-of-network” medical providers, on one hand, and the entities that insure and administer group health plans, on the other (collectively, “Insurers”). For years, out-of-network providers have been suing plans and Insurers claiming they were “underpaid” for their medical services, often to the tune of millions of dollars. Hundreds of these cases have cropped up around the country in recent years. COVID-19 has now opened up a new front in this war, and the first skirmishes have already started. On April 10, 2020, Columbus Specialty Hospital (“Columbus”) filed a complaint in New Jersey state court seeking $36 million from various New Jersey insurance companies (the “Defendant-Insurers”) for payment of treatment it provided during the “COVID-19 crisis.” See Columbus Specialty Hosp. v. Amerigroup Corp., et al., No. ESX-L-002635-20 (N.J. Sup. Ct. April 10, 2020). According to Columbus, it provides “long term acute care” to “immunocompromised seniors”—the “prime targets for COVID-19 infection.” Columbus claims the Defendant-Insurers grossly underpaid it “for the live-saving treatment” it provided to those “vulnerable patients.” Columbus’s lawsuit is similar in some ways to the out-of-network provider cases that have cropped up around the country—but it adds a few new twists. The Common Elements Columbus’s lawsuit shares common features with the out-of-network provider lawsuits that came before it. Like the providers in those cases, Columbus does not directly sue for benefits under the terms of the health plans at issue. Instead, it asserts various contractual and quasi-contractual claims, alleging (among other things) that the Defendant-Insurers promised to pay Columbus its “usual and customary rates” for the services in question. This is a common tactic by out-of-network providers because their “usual” rates are much higher than the rates called for in the plan documents. In another relatively common move, Columbus asserts claims under state “prompt pay” statutes, which regulate the length of time in which an Insurer must pay providers for submitted claims. The New Elements While Columbus’s lawsuit shares a common structure with other out-of-network provider cases, it introduces new elements and could set new trends in this area of litigation. First, Columbus tries to bolster its claims by highlighting the emotional aspects of the “national and state emergency” related to COVID-19. According to Columbus, the Defendant-Insurers’ failure to pay does not simply affect its bottom line; it means members of the “greatest generation” are not receiving “the live-saving care” they deserve. Columbus also accuses the Defendant-Insurers of putting health care workers at risk by preventing Columbus from purchasing personal protection equipment. By tying its claims to the COVID-19 crisis, Columbus is hoping to tilt the scales of equities in its favor—a potentially effective move, especially for claims tried before a jury. Expect other medical providers to follow suit and tie their claims to the COVID-19 crisis. Second, Columbus’s lawsuit indicates that out-of-network providers may be shifting tactics for how they attempt to bind Insurers to “contractual” promises to pay the providers’ rates. As mentioned above, these out-of-network provider lawsuits often turn on whether the Insurer and provider formed a “contract” through communications about reimbursement rates. Traditionally, providers have alleged that such a contract or promise arose from phone calls with an Insurer’s billing department, during which the Insurer allegedly confirmed a patient’s coverage and reimbursement rates. Here, by contrast, Columbus claims it actually faxed formal contracts to the Defendant-Insurers, which they accepted by their conduct. This tactic is plainly an attempt to avoid the contractual formation and ERISA preemption defenses that defendants usually assert in these cases. Expect other out-of-network providers to employ similar tactics in their efforts to bind Insurers to commitments outside the four corners of the relevant health plan document. Third, Columbus’s lawsuit illustrates the astonishing size of provider bills for COVID-19 treatments and the limited time that Insurers have to process those claims. Columbus alleges, for example, that it billed $8.9 million for one patient for services related to COVID-19. While that sum is just an allegation, it is nonetheless a staggering number. And Columbus invokes New Jersey’s “prompt pay” statutes to insist that the Defendants-Insurers should have processed its multi-million dollar bills at breakneck speeds. This combination of large bills and pressure to pay those bills quickly puts enormous pressure on Insurers’ billing departments. This flurry of large bills also opens the door to fraud and abuse by unscrupulous providers. Insurers will have to find a way to manage this risk, while still ensuring that proper bills are paid in a timely fashion. But inevitably, Insurers will discover overpayment after the fact, which may trigger recoupment actions by Insures and the group health plans, which they administer. Should you seek additional information about these types of claims, feel free to contact us.
April 29, 2020
by Andrew Holly and Nick Bullard
