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The Federal No Surprise Act (NSA)

September 24, 2021

On July 1, the Centers for Medicare and Medicaid Services (CMS) along with the Department of Treasury and the Department of Labor published an interim final rule (IFR) implementing key provisions of the NSA. This is the first in a series of rules implementing the NSA and focuses mainly on establishing new protections from surprise billing and the methodology required for plans/issuers to determine the median contracted rates, which will be used in calculating patient cost-sharing. Part II of the IFR regarding the specifics of independent dispute resolution (IDR) process is expected to be released in October 2021. The NSA provisions to protect the guarantor from out of network (OON)/balance billing and the IDR process goes into effect on Jan. 1, 2022.

The IFR “includes the following key aspects” of the No Surprises Act:

  • Applicability to Health Plans
  • The scope of covered services: emergency, including post-stabilization services, and non-emergency.
  • The extent to which state law (rather than the NSA) will apply.
  • Determining applicable patient cost share and provider payment amounts
  • The notice-and-consent “opt-out” process, which is required for an out-of-network provider to bill a patient covered by the NSA in excess of the patient’s applicable in-network cost-share.

State Update:

The NSA defers to state laws that have a method for reimbursing providers in “surprise billing” scenarios, provided the state law is specific to the services provided, the clinician and health plan (the “Three Part Test”). However, not every state has a surprise billing law; several states have “limited” protections, (e.g., only for emergency services, or apply to certain health plans and not others). Additionally, states do not generally have legal jurisdiction to regulate certain types of health plans such as ERISA plans [large employer self-funded plans] and plans sold on the federal health insurance exchange (healthcare.gov).

The NSA is intended to set a minimum standard for patient and clinician protections under the Three Part Test and to fill gaps where state laws either do not exist or lack legal jurisdiction. Patients covered by ERISA plans, ACA plans, and state-regulated group health plans in states with no surprise billing protection would be protected by the NSA and governed by the NSA-IDR process beginning Jan. 1, 2022.

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