by Lindsey Phillips with Burr & Forman, LLP
The No Surprises Act (the “Act”), which became effective on January 1, 2022, was enacted in an effort to provide uniform protections against surprise medical bills. Surprise medical bills often arise when patients unknowingly receive medical care from out-of-network healthcare providers and are billed for the difference between the amount a patient’s health plan would pay for in-network providers and the full amount charged for the medical services received by the patient.
The Act generally prohibits surprise billing in three main categories: 1) when emergency services are provided by out-of-network providers or emergency facilities; 2) when non-emergency services are provided by out-of-network providers at in-network health care facility visits; and 3) when air ambulance services are provided. In these three instances, providers generally are prohibited from billing a patient for an amount that exceeds the in-network limit on cost-sharing.
So, in light of the prohibition on surprise billing, how can out-of-network healthcare providers recover payment for their services? The Act establishes a mandatory Independent Dispute Resolution (IDR) program, that was revised in August 2022, by which out-of-network providers can attempt to receive payment from health plans and insurers for the services they have provided.
The first step is for the provider and health plan or insurer to negotiate a reasonable payment amount. When there is disagreement about the amount owed by the plan or insurer to the provider, either party can initiate an open negotiation period by issuing a notice to the other party within 30 days after the provider’s receipt of the insurer or plan’s initial payment or denial notice. The notice must contain certain information, which includes, but is not limited to, information regarding the services provided and a proposed out-of-network rate for the services and items provided. Once this notice is sent, the parties have 30 days to reach an agreement on the payment amount owed to the provider. If the parties reach an agreement regarding the payment amount, then the plan or insurer must remit the agreed-upon payment to the provider within 30 days of the agreement.
If the parties are unable to reach an agreement on their own, then either party can initiate the Act’s IDR program by providing notice to the other party and the Department of Health and Human Services (or the Department of Labor or Department of Treasury)[1]. The applicable Department will then provide a list of certified IDR entities. The parties will then have three business days to jointly select a certified IDR entity. If the parties are unable to agree on an IDR entity, then the applicable Department will randomly select an IDR entity.
After an IDR entity is selected, each party must submit a proposed payment amount along with supporting documentation for its proposal. The IDR entity will then select the offer that it determines best represents the value of the services provided. In making this determination, the IDR entity should consider the information submitted by the parties, the Qualifying Payment Amount for the applicable year for similar services, and other factors including, but not limited to, the provider’s experience, quality of outcome measurements, and the complexity of the services provided. The IDR entity should also weigh the credibility of the information received. Once the IDR entity reaches a determination, it must issue a written decision that fully explains the basis for its decision, including the information it relied on in determining which amount best represented the value of the services provided. Once the IDR entity renders its decision, the parties are required to comply with the IDR entity’s decision within 30 days.
Lindsey Phillips is an associate at Burr & Forman LLP practicing exclusively in the firm’s Healthcare Industry Group. Lindsey may be reached at (205) 458-5370 or lphillips@burr.com.
[1] Oversight of the No Surprises Act’s provisions is conducted by either the Department of Health and Human Services, Department of Labor, or Department of Treasury depending on the nature of the plan, policy, and provider.