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Surprise Billing Interim Final Rule Part II Regulations Issued

October 1, 2021

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CONTACTS
Gayle Lee, Director, Physician Payment & Quality

On Sept. 30, the Department of Health and Human Services, Department of Treasury, Department of Labor, and the Office of Personnel Management released an Interim Final Rule (Part 2 Surprise Billing Regulations) with comment that implements portions of the No Surprises Act, legislation that regulates balance billing by out-of-network providers. This regulation, the third issued on the act, addresses the independent resolution (IDR) process, good faith estimates for uninsured or self-pay individuals, and the patient-provider dispute resolution process.

In conjunction with the release of these rules, the agencies established a website that provides information about the law’s provisions, where organizations can apply through a portal to be independent dispute resolution entities, and where providers and payers can initiate the IDR process. While the provisions in this rule go into effect Jan. 1, 2022, the public will have 60 days after publication in the Federal Register to submit comments. The agencies provided additional information via fact sheets containing background information and outlining related requirements as well as in an HHS press release.

Independent Resolution Process

This rule establishes the federal IDR process that out-of-network providers, facilities, and plans may use to determine a payment rate in the case of a failed open negotiation period. The parties can jointly select a certified independent dispute resolution entity to resolve the dispute over the payment rate. Notably, the rule states that the IDR entity must “begin with the presumption that the Qualifying Payment Amount (QPA) is the appropriate [out-of-network] amount.” The QPA is determined based on the median contracted prices in the area for the same medical service.

The rule acknowledges that other factors included in the statute, including training and experience, complexity of procedure or medical decision-making, and others, could be considered. However, to deviate from the QPA as the payment rate, providers must submit evidence of these factors that clearly demonstrates that the QPA is “materially different” from the appropriate out-of-network rates. The AAMC has concerns with this approach and believes that it is inconsistent with the intent of Congress, and previously commented on what should be included in the IDR [refer to Washington Highlights, May 13]. The rule also establishes time frames for the IDR process.

As part of the IDR process, providers have an opportunity to “batch” claims appealed to arbitration. In the rule, the departments adopt a definition of batching that will allow claims billed with the same National Provider Identifier (NPI) or Taxpayer Identification Number (TIN) to be batched. These claims must be for items and services billed under the same Current Procedural Terminology (CPT) code; Healthcare Common procedure coding system (HCOPCS) and Diagnosis Related Group (DRG) service code, or a comparable code. Items and services furnished within the same 30-business-day period, or within the 90-day “cooling-off period” following a resolution determination may be batched.

Interaction of State and Federal Law

The rule provides information on the interaction of state and federal law. According to the rule, the state law will apply when a state has a law with a process for determining the total amount payable. States will play a significant role in enforcement of the new balance billing protections, with the HHS only enforcing the regulation in cases where the state does not have the authority to enforce it or is otherwise not enforcing it.

Good Faith Estimates

The rule states that providers or facilities are required to provide a good faith estimate of expected charges for items and services to an uninsured (or self-pay) individual. The good faith estimate must include expected charges for items or services that “are reasonably expected to be provided in conjunction with such scheduled or requested items or services.” This would include items and services provided by other providers and facilities. Recognizing that it will take time for providers and systems to establish processes related to the good faith estimates, the HHS will exercise enforcement discretion from Jan. 1, 2022, through Dec. 31, 2022, when the good faith estimate does not include expected charges from other providers and facilities involved in the patient’s care.

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