Federal legislation to protect healthcare consumers against surprise “balance bills” will take effect for plan years beginning on or after January 1, 2022. 

Called the “No Surprises Act,” the new law protects insured individuals from excessive medical bills if they go to an out-of-network emergency facility or are treated by an out-of-network provider practicing at an in-network facility (under certain protected services). In such instances, the consumer can only be billed in-network rates and cannot get a “balance bill”, and, providers and health plans must resolve payment amount differences without involving the consumer.

Interim final regulations released earlier this year outline how health insurance carriers, group health plan sponsors, and healthcare providers determine a “qualified payment amount” (QPA).  The QPA is a median payment rate plans and providers will use to value out-of-network protected services.  Last week, the Biden Administration followed up with another interim rule which outlines the process plans and providers can use if they cannot agree on fair payment for services rendered. The law terms this the independent dispute resolution process (IDR ), but it’s more commonly known as arbitration.

Unless a state balance billing law exists, the provider payment and IDR process will work as outlined here.  Since some states (including New Jersey) already have state laws protecting consumers against balance billing, the federal law will generally serve as a protection “floor,” and greater state-level protections regarding payment amounts may prevail. Self-funded groups may elect to follow either the state protections or federal process.

Employers need to know that health insurance carriers (or the third-party administrator in the case of a self-funded or level-funded plan) will handle most of the surprise billing payment process behind the scenes.  However, the employer who sponsors each group health plan also has some general responsibilities.  Group plan sponsors need to make sure participants receive the notice about their rights under the No Surprises Act each year starting January 1, 2022.  In addition, all employers (particularly those with self-funded or level-funded plans) should review their agreements with their carrier or TPA to ensure that these entities will follow all of the steps outlined on behalf of the group plan sponsor (and if and when their participation might be required in the IDR process). 

As updates and additional guidance are released, we will advise.

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