An Overview of the No Surprises Act

If you are a regular reader of this column, you are probably familiar with the No Surprises Act. The act was passed in December 2020 with the intent of protecting patients from unexpected out-of-network (OON) medical bills. As someone who has received surprise OON bills from radiology and lab companies used by my in-network physician, I can appreciate this legislation. As someone who battles with insurance companies for the reimbursement owed to my clients for the services they’ve rendered, this act presents both challenges and advantages for providers that render surprise OON services.

Key Points of the No Surprises Act

To effectively prepare your practice for the No Surprises Act, it is beneficial to understand the key points of the act. Reviewing these key points is the focus for this edition of From the Field; in the next edition we will discuss steps you can take to prepare your practice for the act.

The act considers surprise scenarios to be situations where the patient receives services from an OON provider at an in-network facility. An example of this that I have seen frequently with nephrologists is when the doctor is rounding at a hospital that is in-network for a patient, but the nephrologist is OON with the patient’s insurance.

The next key point has to do with the type of insurance plan involved and the state where services are rendered. The No Surprises Act defers to state laws that cover surprise medical billing—but not every state has a law. Additionally, there are certain types of insurance plans that states have no jurisdiction to regulate, such as federal health care exchange plans and ERISA plans. To clarify, if a patient is covered by an insurance plan administered by the state and services were rendered in a state that has a no surprise billing law, the federal No Surprises Act would not apply. However, if a patient is covered by a federal insurance plan, the No Surprises Act would apply.

The act protects patients by limiting the amount they are required to pay to OON providers to that of their estimated in-network co-insurance and/or deductible amounts. The patient’s cost-sharing amount is based on what is referred to in the act as a “qualifying payment amount,” or QPA. The QPA is defined as the lesser of the billed charges or the patient’s health plan’s median contracted rate. Additionally, the act has provisions for determining the amount to be paid to the OON provider. These provisions are as follows:

  • An amount determined by an applicable All-Payer Model Agreement under section 1115A of the Social Security Act;
  • If there is not an applicable all payer model agreement, an amount determined by a specified state law;
  • If there is not an applicable all payer model agreement or state law, an amount agreed upon by the insurance plan and the provider;
  • If the three previous conditions do not apply, an amount determined by an independent dispute resolution (IDR) entity.

Providers must attempt to come to an agreement with an insurance company regarding the reimbursement rate for OON services for a minimum of 30 days, after which the insurance company must issue an initial payment or denial to the provider. In the event the provider does not agree with the initial payment, the provider may initiate the IDR process within 4 days of the receipt of the initial payment.

At the conclusion of the IDR process, the provider may not take the other party to IDR for the same item or service for 90 days. This means that once a provider concludes the IDR process with an insurance company—for example, for hospital E & M encounters—the provider may not bring the insurance company to IDR for 90 days (allowing for the possibility of denials or underpayments from the insurance company for OON services that would not be subject to IDR).

The act also requires providers to publish a notice on balance billing protections that may be available for patients. CMS has provided on the CMS.gov website a template disclosure that providers may use (form CMS-10780).

In the next edition of this column, we will cover some processes and protections for providers to consider in their practices to mitigate the impact of the No Surprises Act. Please stay tuned.

Sarah Tolson is the director of operations for Sceptre Management Solutions, Inc., a company specializing in billing for outpatient ESRD dialysis programs, nephrology practices, and interventional nephrology. Your questions are welcome, and she can be reached at [email protected], 801.775.8010, or via Sceptre’s website, www.sceptremanagement.com.