Blogs

Surprise Billing Part II Interim Final Rule with Comment Period: Independent Dispute Resolution, the Patient-Provider Dispute Resolution Process, Good Faith Estimates, and External Review

On September 30, the Departments of Health and Human Services (HHS), Labor, and Treasury, in conjunction with the Office of Personnel Management (OPM), issued an interim final rule (IFR) with comment period, titled “Requirements Related to Surprise Billing; Part II,” implementing provisions of the No Surprises Act to protect patients from surprise medical bills. Specifically, this IFR implements provisions of the No Surprises Act related to the independent dispute resolution (IDR) process, good faith estimates for uninsured (or self-pay) individuals, the patient-provider dispute resolution process, and external review. Additionally, in this IFR HHS has announced the establishment of an online Federal IDR Portal that will serve as the hub of the IDR process. The provisions outlined in this IFR are set to be effective January 1, 2022, and HHS will release more information prior to the implementation date.

Comments on this IFR are due no later than 5 pm ET on December 6.

Federal Independent Dispute Resolution Process

The IFR outlines the processes for resolving payment disputes between out-of-network providers or health care facilities and health plans. Specifically, the IFR outlines procedures and timelines for how the federal IDR process will operate; provides standards for how certified IDR entities can make payment determinations; and establishes requirements for IDR entities to become certified, including a process by which the public can petition for the denial of a certification.

The IDR process begins with a 30-day open negotiation period which can be initiated by any party to determine a payment rate beginning on the day the provider or facility receives either an initial payment or notice of denial of payment for an item or service. Disputing parties have 30 days to negotiate amongst themselves and if that concludes unsuccessfully, they have four business days following that period to initiate the federal IDR process.

The IDR process can be used for emergency services as well as non-emergency services that are furnished by out of network providers at participating facilities, and air-ambulance services furnished by out of network providers. Either party may initiate the IDR process – the initiating party must submit a Notice of IDR Initiation through the Federal IDR Portal. The Notice of IDR Initiation must include:

1. Information sufficient to identify the qualified IDR items or services (and whether the qualified IDR items or services are designated as batched items and services), including the dates and location of the items or services, the type of qualified IDR items or services (such as emergency services, post-stabilization services, professional services, hospital-based services), corresponding service and place-of-service codes, the amount of cost sharing allowed and the amount of the initial payment made by the plan or issuer for the qualified IDR items or services, if applicable;
2. The names and contact information of the parties involved, including email addresses, phone numbers, and mailing addresses;
3. The state where the qualified IDR items or services were furnished;
4. The commencement date of the open negotiation period;
5. The initiating party’s preferred certified IDR entity;
6. An attestation that the items or services are qualified IDR items and services within the scope of the Federal IDR process;
7. The qualifying payment amount (QPA) which was defined in the first IFR;
8. Information about the QPA as described in the regulations; and
9. General information describing the Federal IDR

All parties must jointly select a certified IDR entity within three business days following the IDR Initiation. If the parties agree on a certified IDR entity, the notice of the certified IDR entity selection must include: (1) the name of the certified IDR entity; (2) the certified IDR entity number; and (3) an attestation by both parties (or by the initiating party if the other party has not responded) that the selected certified IDR entity does not have a conflict of interest. If the parties cannot make a mutual agreement to select an IDR entity, the department will step in and select one within three additional business days.

Once an IDR entity is selected, parties from that point have 10 business days to submit their offers for a payment amount and any other information associated with the offer for the consideration of the IDR entity. Specifically, all parties must submit the following information:

• The offer for a payment amount for the qualified IDR item or service furnished by the provider, expressed both as a dollar amount and as a percentage of the QPA;
• Additional information requested by the certified IDR entity relating to the offer; and
• Specifics regarding the size of the practice or facility (provider) and the coverage and geographic region for purposes of the QPA (health plan).

Each party must pay a $50 administration fee to the IDR entity. Additionally, the IDR entity will charge a fee for conducting the arbitration which HHS estimates will range from $200-500.

To make a payment determination, certified IDR entities must start the process with the assumption that the QPA is an appropriate out-of-network payment amount. They also must consider additional information when it is credible as it relates to the offer. Certified IDR entities must select the offer that is closest to the QPA unless credible information clearly demonstrates that the QPA is “materially different” from what the appropriate out of network rate is. This rule gives the QPA primary consideration as the statute places emphasis on the QPA. The statute provides detailed rules for how the QPA must be calculated and requires the departments to report offers as a percentage of the QPA, suggesting that the QPA is an appropriate benchmark for the out of network rate. The IDR entity has 30 business days to make a determination.

The rule also specifies criteria under claims for multiple qualified items and services may be “batched” and considered as part a single IDR process. Claims can be brought to the IDR process in a consolidated or batched manner in the following circumstances:

1. Items and services are billed by the same provider or group of providers or health care facility or same provider of air ambulance services. Claims must be billed under the same National Provider Identifier (NPI) or Taxpayer Identification Number (TIN);
2. Payment for the items and services would be made by the same group health plan or health insurance issuer;
3. Qualified IDR items and services must be the same or similar; and
4. Items and services have been furnished within the same 30-business-day period, or the 90-calendar-day suspension period.

Good Faith Estimates

The No Surprises Act requires health care providers and health care facilities, upon scheduling an item or service to be furnished to an individual or at the request of an individual, to inquire about such individual’s health coverage status. For insured patients planning to submit a claim for the services, the provider or facility is required to provide a good faith estimate to the individual’s plan or insurer to inform the advanced explanation of benefits (EOB) which must be provided to the patient. The good faith estimate must be delivered directly to uninsured and self-pay patients. This requirement applies to all physician services. However, HHS is deferring enforcement of the former requirement—for providers to transmit good faith estimates to insurers and plans—for the time being because of the challenges to develop the technical infrastructure required to do so. Stakeholders have requested implementation be delayed until standards for data transfer between providers and facilities and plans and insurers are established and the necessary infrastructure can be built. The Departments agree and will undertake separate notice and comment rulemaking on this topic in the future.

Good faith estimates must be provided in writing and orally, and the convening provider or facility must orally inform uninsured (or self-pay) individuals of the availability of a good faith estimate when questions about the cost of items or services arise. The updated statute permits all consumers to ask their providers for a good faith estimate and an advanced (EOB). For uninsured or self-pay individuals, the provider is required to provide a list of services and estimated costs, including expected billing and diagnostic codes. The good faith estimate must include any item or service that is expected to be provided in conjunction with a scheduled or requested item or service by another provider (co-provider) or facility (co-facility), like any laboratory or imaging services.

Providers must provide a good faith estimate within three business days after an uninsured (or self-pay) individual requests a good faith estimate. More specifically, providers must provide a good faith estimate within one business day of scheduling an item or service to be provided in three business days, and within three business days of scheduling an item or service to be provided in 10 business days. Good faith estimates must be provided in written form either on paper or electronically.

The rule defines the convening health care provider or convening health care facility as the provider or facility who receives the initial request for an appointment, or a good faith estimate from an uninsured (or self-pay) individual and who is or, in the case of a request, would be responsible for scheduling the primary item or service. The co-health care provider or co-health care facility (co-provider or co-facility) is defined as the provider or facility other than a convening provider or a convening facility that furnishes items or services that are customarily provided in conjunction with a primary item or service. Note that facility is defined more broadly for the purposes of good faith estimates than it is for non-emergency services for the No Surprises Act.

The convening/primary provider or health care facility is required to contact all co-providers and co-facilities no later than one business day after the request for the good faith estimate is received or after the primary item or service is scheduled, and request submission of expected charges for items or services that meet the requirements for co-providers and co-facilities. HHS seeks comments on this as well as methods and standardized processes, that could facilitate accurate and efficient transmission of good faith estimate information from co-providers or co-facilities to convening providers or convening facilities.

The good faith estimate issued by the provider or health care facility to the uninsured or self-pay individual must include the following:

• Patient name and date of birth;
• Description of the primary item or service in clear and understandable language;
• Itemized list of items or services, grouped by each provider or facility, reasonably expected to be provided for the primary item or service, and items or services reasonably expected to be furnished in conjunction with the primary item or service, for that period of care including: (1) those items or services reasonably expected to be furnished by the convening provider or convening facility, and (2) those items or services expected to be furnished by co-providers or co-facilities;
• Expected service codes, applicable diagnosis codes and expected charges associated with each listed item or service;
• Name, NPI, and TIN of each provider or facility represented in the good faith estimate, and the state(s) and office or facility location(s) where the items or services are expected to be furnished by such provider or facility;
• List of items or services that the convening provider or convening facility anticipates will require separate scheduling and that are expected to occur before or following the expected period of care for the primary item or service;
• A disclaimer that informs the uninsured or self-pay individual that there may be additional items or services the convening provider or convening facility recommends as part of the course of care that must be scheduled or requested separately and are not reflected in the good faith estimate;
• A disclaimer that informs the uninsured or self-pay individual that the information provided in the good faith estimate is only an estimate of items or services reasonably expected to be furnished at the time the good faith estimate is issued to the uninsured or self-pay individual and that actual items, services, or charges may differ from the good faith estimate;
• A disclaimer that informs the uninsured or self-pay individual of their right to initiate the patient-provider dispute resolution process if the actual billed charges are substantially more expensive the expected charges included in the good faith estimate; and
• A disclaimer that the good faith estimate is not a contract and does not require the uninsured or self-pay individual to obtain the items or services from any of the providers or facilities identified in the good faith estimate.

 The good faith estimate information submitted by co-providers or co-facilities to convening providers or convening facilities must include:

• Patient name and date of birth;
• An itemized list of items or services expected to be provided by the co-provider or co-facility that are reasonably expected to be furnished in conjunction with the primary item or service as part of the period of care;
• Expected service codes, applicable diagnosis codes and expected charges associated with each listed item or service;
• Name, NPI, and TIN of the co-provider or co-facility, and the state(s) and office or facility location(s) where the items or services are expected to be furnished by the co-provider or co-facility; and
• A disclaimer that the good faith estimate is not a contract and does not require the uninsured or self-pay individual to obtain the items or services from any of the providers or facilities identified in the good faith estimate.

HHS acknowledges that unforeseen factors could occur during treatment, which would involve additional items and/or services, resulting in higher actual billed charges. The IFR does not require the good faith estimate to include charges for unanticipated items or services that are not reasonably expected and those that could occur due to unforeseen events.

Below is an example of a good faith estimate.

HHS acknowledges that these requirements may impose burdens on providers and health care facilities and is seeking comment on how the required methods for providing a good faith estimate to uninsured or self-pay individuals may affect small practices or rural providers or facilities. Additionally, HHS recognizes that providers or facilities may need to establish more robust and secure communication channels for transmission of good faith estimate information between convening providers or facilities and co-providers and co-facilities and seeks information on any related challenges.

HHS also understands that it may take time for providers and health care facilities to develop and implement systems and processes for providing and receiving the required information from other co- providers and co-facilities. Therefore, for good faith estimates provided to uninsured or self-pay individuals from January 1, 2022, through December 31, 2022, HHS will exercise its enforcement discretion in situations where a good faith estimates do not include expected charges from other providers and facilities that are involved in the individual’s care.

Patient-Provider Dispute Resolution

If the eventual service/treatment cost is greater than what had been quoted by the provider in the good faith estimate, the patient is allowed to invoke the arbitration process. Specifically, the actual billed charges must be at least $400 more than the good faith estimate. Patients have 120 calendar days from the day they receive the bill to start the dispute resolution process by submitting an initiation notice to the Secretary of HHS and pay an administration fee of $25 to invoke this process – HHS set this price to ensure it would not deter patients from utilizing this process. The initiation notice and the $25 fee must be submitted on the online Federal IDR portal.

HHS will select a selected dispute resolution (SDR) entity who will make payment determinations and resolve disputes as part of the patient-provider dispute resolution process. The SDR entity will send a notice to the health care provider or health care facility initiating the dispute resolution process. The health care provider or facility must submit information to the SDR entity no later than 10 business days after receiving the notice. The required information must include: (1) copy of the good faith estimate provided to the uninsured or self-pay individual for the items or services under dispute; (2) a copy of the bill provided to the uninsured or self-pay individual for items or services under dispute; and (3) if necessary, documentation providing evidence to demonstrate the difference between the billed charges and the expected charges in the good faith estimate reflects a medically necessary item or service and is based on unforeseen circumstances that could not have reasonably been anticipated by the provider or facility when the good faith estimate was provided.

The SDR entity must make a payment determination no later than 30 business days after receiving the necessary information from all parties. If the arbitrator decides the price is too high and lowers that cost for the patient, the individual will also get their $25 administration fees credited.

External Review

The Affordable Care Act established the external review process that patients can use to appeal decisions made by their health plan. Health plans are required to adhere to state external review processes for the external review of adverse benefit determinations that are based on requirements for medical necessity, appropriateness, health care setting, level of care, or effectiveness of a covered benefit. Further, the federal external review process must be available for any adverse benefit determination by a plan or issuer that involves medical judgment, as well as rescissions. Patients can dispute adverse determinations that their insurance company provided them to an external review panel.

This IFR expands the scope of claims eligible for external review to include adverse benefit determinations related to compliance with the surprise billing and cost-sharing protections under the No Surprises Act. Therefore, if a patient receives a surprise bill, they are eligible to undergo the external review process. The IFR provides the following five examples to clarify how external review of adverse benefit determinations involving items and services within the scope of the surprise billing and cost- sharing protections for out-of-network emergency services, non-emergency services, and air ambulance services:

1. Whether a claim is for treatment for emergency services that involves medical judgment or consideration of compliance with the cost-sharing and surprise billing
2. Whether a claim for items and services furnished by a non-participating provider at an in- network facility that is subject to the protections under the No Surprises Act is eligible for external review because adjudication of the claim requires consideration of health care setting and level of care or compliance with cost-sharing and surprise billing
3. Whether an individual was in a condition to receive a notice about the availability of the protections under the No Surprises Act and give informed consent to waive those protections is a claim eligible for external review because adjudication of the claim involves consideration of compliance with the cost-sharing and surprise billing protections and medical judgment.
4. Whether a claim for items and services is coded correctly, consistent with the treatment an individual actually received, is a claim eligible for external review because adjudication of the claim involves medical
5. Whether cost-sharing was appropriately calculated for claims for ancillary services provided by an out-of-network provider at an in-network facility involves consideration of compliance with the cost-sharing and surprise billing

The departments seek comment on whether additional clarification or examples are necessary.

Additionally, grandfathered health plans that were not previously subject to external review requirements will now be subject to external review requirements for coverage decisions that involve whether a plan or issuer is complying with the surprise billing and cost-sharing protections under the No Surprises Act. Therefore, patients in grandfathered health plans are now able to access external review.