The forecast for the “no surprise” billing rules under the Consolidated Appropriations Act, 2021, continues to be foggy at best, as regulators seek to chart a course through court decisions that have vacated key provisions in regulatory guidance.
In August 2023, the District Court issued a ruling that invalidated a number of other provisions in the Departments’ regulations, and the Departments responded in a recent set of FAQs addressing the impact of the new court decision.
The no surprise billing rules prohibit out-of-network providers from billing patients more than a network level of cost-sharing in specified circumstances, when patients have little or no choice with respect to their providers. They apply, for example, when a patient receives emergency care in an out-of-network hospital. The rules also establish a process and guidelines for determining how much group health plans (and insurers) will pay in these circumstances.
The Departments have issued extensive guidance on these rules. Much of the guidance pertains to the qualifying payment amount (QPA). For any service furnished by an out-of-network provider subject to the no surprise billing rules, the QPA is the median amount that a plan has negotiated with similar in-network providers for the same service in the same geographic area.
The QPA is used in determining the amount that a patient is required to pay for out-of-network services and factors into how much a group health plan must pay for those services. The regulations address other subjects, such as the timing of payment and the process for resolving disputes over the amount of a plan’s payment.
The most recent court decision, (August. 2023), takes issue with certain regulatory provisions that address how the QPA will be calculated. For example, the court:
- Narrowed the similar in-network providers who may be taken into account in calculating the QPA;
- Required that the QPA include bonus and incentive payments made to network providers; and
- Required that the QPA calculation be based on the plans of the plan sponsor, eliminating the option of basing the QPA on the plans administered by the applicable claims administrator.
The FAQs make it clear that the Departments intend to appeal certain of the court’s rulings, but recognize that the District Court’s decision is now in effect. For that reason, the FAQs advise plans to determine the QPA in accordance with a current, good-faith interpretation of the statute. At the same time, observing that it may take time for plans to adjust to the District Court’s decision, the Departments announce a non-enforcement policy for plans that follow the regulations as published until May 1, 2024 (with a possible extension until November 1, 2024).
For plan sponsors, these developments could ultimately result in increased benefit costs and administrative fees. Plan sponsors may wish to confer with their administrators and insurers to see how they are responding to the court’s rulings and the FAQs. Plan sponsors should continue to watch as the courts and regulators work their way through the mist.
