Recent No Surprises Act & Health Plan Transparency Guidance

No Surprises Act Background

The No Surprises Act (NSA), part of the Consolidated Appropriations Act of 2021, protects individuals covered under group and individual health plans from receiving surprise medical bills (also known as “balance billing”) when they receive most emergency services, non-emergency services from out-of-network providers at in-network facilities, as well as services from out-of-network air ambulance providers. The NSA went into effect on January 1, 2022, with certain disclosure requirements. Click here and here for prior Risk Strategies articles with more details on the NSA.

Generally, under the NSA balance billing protection rules, plan participants are responsible only for the applicable in-network cost-sharing amount (such as deductibles, copayments and/or coinsurance) for the out-of-network services received under the NSA, particularly (as listed above) most emergency services, non-emergency services from out-of-network providers at in-network facilities, as well as services from out-of-network air ambulance providers.

ACA Cost-Sharing Limit Background

The ACA generally imposes an overall cost-sharing limitation that is an out-of-pocket maximum (“MOOP limit”), applicable to all non-grandfathered group health plans.

In general, cost-sharing under the ACA includes deductibles, coinsurance, and copayments but does not include premiums, balance billing amounts, or spending for noncovered services.

Transparency In Coverage (TiC) Background

The Transparency in Coverage (TiC) Final Rules, finalized in November 2020, required non-grandfathered group health plans to provide a searchable, internet-based self-service tool reflecting accurate cost-sharing and rate information for plan participants. The first phase required information for 500 specified items and services to be accessible to plan participants by January 1, 2023. The remaining covered items and services under the TiC rules must be available through this self-service tool for plan years beginning on or after January 1, 2024. Click here for a prior Risk Strategies article with more details on TiC requirements.

FAQs Guidance

NSA

This guidance clarifies the following:

• For purposes of the NSA rules, “participating” providers/facilities/emergency facilities are those having a direct or indirect contractual relationship with a group health plan (or insurance carrier). “Nonparticipating” providers/facilities/emergency facilities are those in which a plan (or insurance carrier) does not have a direct or indirect contractual relationship.
• For purposes of the MOOP limit under the ACA, “in-network” providers are those having a direct or indirect contractual arrangement with a group health plan (or insurance carrier). “Out-of-network” providers are those providers/facilities in which a plan (or insurance carrier) does not have a direct or indirect contractual arrangement.

The first FAQ under this guidance confirms that cost-sharing for services provided by a “nonparticipating” provider/facility, including an air ambulance provider, is considered to be out-of-network cost-sharing for benefits provided within a plan’s network for purposes of the MOOP limit under the ACA. Similarly, cost-sharing for services provided by a “participating” provider/facility, including an air ambulance provider, is considered to be in-network cost-sharing for purposes of the MOOP limit.

The second FAQ concerns instances where plans have contracts with providers/facilities, including air ambulance providers, but are still considered “out-of-network.” In these instances, plans must consider these providers/facilities as “participating” for purposes of the NSA as well as “in-network” for purposes of the MOOP limit under the ACA.

This provision of the FAQs guidance resolves a possible gap (or loophole) from prior guidance to curtail balance billing practices under the NSA. The prior guidance stated if a plan includes a network of providers, the plan may, but is not required to, count an individual’s out-of-pocket spending for out-of-network items and services toward the MOOP limit.^[1]

TiC - Price Comparison Tools & Facility Fees

This guidance addresses the Departments’ concern with the increased frequency of facility fees being charged for services received outside of hospital settings, which expose patients to financial risk and often come as a surprise to them. The Departments also commend the efforts of several states^[2], who have taken (or are considering taking) action to prohibit, limit, or increase transparency around facility fees.

To address this concern, the final FAQ confirms that facility fees must be included in the definition of “covered items and services” under the TiC rules. As such, plans are required to make price comparison information for covered facility fees available to plan participants through an internet-based self-service tool and in paper form, upon request.

Finally, the Departments state that they anticipate releasing proposed rules in the future to address facility fees with respect to the NSA’s Advanced Explanation of Benefits (AEOB) notification requirements^[3].

Employer Next Steps

As employers gear up for annual enrollment and implement new (or renew existing) contracts with plan carriers/third-party administrators (TPAs), they are advised to ensure these service providers are complying with the guidance outlined above. Specifically, they should receive written confirmation from these service providers that:

1. The MOOP limits under the ACA and the balance billing and cost-sharing protections under the NSA (in accordance with this recent Departments guidance) are properly coordinated under the plan’s administration, and;
2. The plan’s price comparison tool, effective for January 1, 2024, will include facility fees being charged for services received outside of hospital settings.

Reach out to your Risk Strategies representative with any questions or contact us directly at benefits@risk-strategies.com.

[1] ACA FAQs Part 18, January 9, 2014, Q/A 4.

[2] Including Connecticut, Minnesota, Texas, Washington, and Colorado.

[3] Enforcement of AEOB notification requirements under the NSA has been delayed, pending the issuance of further guidance.