Over the past few months, two new compliance requirements have been created for group health plans. The new compliance requirements are: The No Surprises Act and the Transparency Rule. We will issue two articles explaining these components. The No Surprises Act is discussed below. Stay tuned for the next article in this compliance series where we will discuss the impact of the Transparency Rule.
Who does the No Surprises Act affect?
The No Surprises Act affects:
- Health plans subject to federal health care reforms under ERISA, the Internal Revenue Code, and the Public Health Service Act;
- Most group health plans and insurers, including grandfathered plans. Grandfathered plans are plans that were already in existence on the day the Affordable Care Act (ACA) was enacted (March 23, 2010)—that have continued to cover at least one person and have not undergone any significant changes to reduce benefits or increase costs to consumers.
- Retiree-only plans, and
- Excepted benefits (benefits not covered under traditional health insurance, such as disability, vision, dental, etc).
What is the No Surprises Act and when it is effective?
On December 27, 2020, Congress passed the Consolidated Appropriations Act of 2021 which, among many things, created the No Surprises Act. The purpose of this Act is to provide relief and transparency to charges for out-of-network (OON) costs passed through to patients in surprise or balance bills. Surprise or balance billing has been practiced in the US since the 1980’s. Patients might receive a surprise or balance bill when the patient goes to an in-network doctor or facility, who in turn, uses uncontracted or out-of-network assistants (ex. nurses, other doctors, specialists, etc). This is an issue that can affect anyone, leaving many consumers responsible for large, unforeseen bills. The No Surprise Act is effective for health plan years beginning on or after January 1, 2022.
What should a Health Plan and Plan participants expect?
Patients are now protected from balance billing from out of network (OON) providers. Patients are only responsible for in-network cost sharing for non-network:
- Emergency services,
- Providers at in-network facilities, and
- Air ambulance services.
In addition, cost sharing must also count toward the patient’s in-network deductible and out-of-pocket maximum. Once the health plan receives the OON bill there is a 30 day negotiation period for providers and plans to reach an agreement on payment. The amount paid by the health plan is determined through an independent dispute resolution (IDR) process. The IDR reviewer will only consider certain factors in making its decision, such as the rate paid to in-network doctors for the same procedure. The IDR reviewer cannot consider usual, customary, and reasonable (UCR), billed charges or Medicare/Medicaid in making decision. The IDR reviewer will select one of the parties’ offers, and the losing party pays.
Health plans can expect potentially new administrative, implementation and additional claim expenses related to the compliance of this Act. A health plan will be required to demonstrate good faith efforts to comply with this Act by making a written compliance plan. The written document should be available to inquiries of auditors or regulatory agencies. Your health plan may need to be in compliance with this Act.
reach out to a member of Withum’s Multiemployer Benefit Plans Team today to discover how you can prepare to implement these new requirements.
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