“Part 1” of the much anticipated surprise-billing regulations was released yesterday. The interim final rule is the first in what is expected to be a lengthy process of rulemaking from the Administration that will last well into the fall. 

Earlier this summer, NAHU submitted a letter to the Administration with suggestions on future rulemaking and items we felt we needed more guidance on. Those items included questions about how the independent dispute resolution or arbitration process would be implemented, what entities could serve as arbitrators, and what data elements could be taken into consideration, such as the median in-network rate when a claim is being considered by arbitrators. Unfortunately, these policy questions were not included in this round of guidance, but the agencies will be releasing more rules in the coming months to address these concerns.

The agencies did, however, address a few of the other questions we included in our letter regarding notices to consumers, post-stabilization services and how qualified payment amounts would be calculated. 

Notices

The No Surprises Act allows an individual to waive balance-billing protections only after receiving a written notice that includes detailed information designed to ensure that individuals knowingly accept out-of-pocket charges (including charges associated with balance-bills) for care received from a nonparticipating provider or nonparticipating emergency facility. The interim final rule states that a standard document will be provided by HHS in future guidance. 

The standard notice document will contain the elements required by the statute in a manner that is intended to be easy to read and comprehend. Providers and facilities will need to tailor the document in each case to include information specific to the individual. Required information includes: out-of-network providers, good-faith estimate of services and acknowledgement that treatment by an out-of-network provider or at an out-of-network facility may lead to balance-billing. Many other items are included in the notice and the requirement for timing of the notice is 72 hours before care is provided for non-emergency care.

Regarding notice and consent, NAHU cautioned the agencies this summer that consumers are often given many forms when seeking treatment and that the importance of these notices should not be compiled with other information that may confuse the consumer. HHS responded to that comment in the interim final rule by agreeing that individuals may be less likely to review the notice carefully if it is embedded within other information or provided with additional consent forms. Therefore, these interim final rules require that the notice be provided with the consent document, and together these documents be given physically separate from and not attached to or incorporated into any other documents. Providers and facilities must provide the notice within the required timeframe. The notice must be written and provided on paper or, as practicable, electronically, as selected by the individual. 

Post-Stabilization Services

In our letter this summer, NAHU voiced concern about how post-stabilization services would be treated under the No Surprises Act. We asked how stabilization would be defined for patients who may have been admitted to an out-of-network facility and could be transferred to in-network care and how consent would be treated in those circumstances, especially if the patient was unable to communicate and the decision may be that of someone with medical power of attorney over the patient. 

The interim final rule includes post-stabilization services as part of “emergency care” so that surprise-billing protections extend to post-stabilization care. In order for a patient to be considered stabilized:

• First, the attending emergency physician or treating provider must determine that the participant, beneficiary or enrollee is able to travel using nonmedical transportation or nonemergency medical transportation to an available participating provider or facility located within a reasonable travel distance, taking into consideration the individual’s medical condition.
• Second, the provider or facility furnishing post-stabilization services must satisfy the notice and consent criteria.
• Third, the individual (or the individual’s authorized representative) must be in a condition to receive the information in the notice and to provide informed consent under such section. Whether an individual is in a condition to receive the information in the notice is determined by the attending physician or treating provider using appropriate medical judgment.
• Finally, consent must be made voluntarily, meaning the individual must be able to consent freely without undue influence, fraud or duress. If post-stabilization services must be provided quickly after the emergency services are provided, it may be challenging for individuals or their authorized representatives to have adequate time to make a clear-minded decision regarding consent. Consent obtained through a threat of restraint or immediacy of the need for treatment is not considered voluntary.

The agencies recognize that with each of these requirements there will be other circumstances that will need to be taken into consideration, such as distance between the out-of-network and in-network facilities, availability of emergency or medical transportation if needed, and possible disruption of treatment. Overall, the clarification in this interim final rule will serve as an important consumer protection to ensure that patients are not forced to leave facilities before they are willing and able to do so with approval from their treating physician and informed consent from the patients.

Qualified Payment Amounts

The calculation of qualified payment amounts (QPAs), which is the lesser of the billed charge or the plan’s or issuer’s median contracted rate, is a section of the No Surprises Act that received a lot of attention from stakeholders. The QPA will ultimately play a large role in determining the rates which out-of-network providers may charge as well as a possible negotiation point in arbitration. However, the arbitration process was not included in this interim final rule so we can only focus on what was released on the QPA itself.

During the negotiations of this section of the No Surprises Act, some policymakers felt strongly that a national third-party claims database should be established to collect data on claims to then be used to determine QPAs. NAHU felt that this role would be better suited for state all-payer databases, which is what was included in this interim final rule. If a state does not have an all-payer database, the calculations will be made based on geographic criteria. As requested by NAHU, the interim final rule also goes in to detail of how QPAs can be calculated by new payers and for new services that may enter the market. 

Ultimately, the determination of QPAs as outlined here will pass savings on to consumers by limiting cost-sharing to in-network levels by basing cost-sharing for out-of-network services on the state all-payer agreements.

Much of the practical applicability of these and other sections of this first interim final rule will be determined by the rules that follow in the coming month. This is just the first piece in the puzzle before we are able to put the full picture together. “Part 1” requests comments within 60 days, and NAHU will be providing our comments on the aspects included in this rule as well as working with the administration as they draft subsequent rulemaking. NAHU will also be providing guidance for implementing these rules in future podcasts, Compliance Corner webinars and Washington Update articles.