out-of-network Archives - EMPLOYEE BENEFITS BLOG

Agencies Issue FAQs on Surprise Billing and Cost-Sharing Rules Coordination

by Alden Bianchi | Jul 25, 2023 | Employee Benefits, Health and Welfare Plans

A recent article by the Kaiser Family Foundation (KFF) and National Public Radio (NPR) raised the prospect that patients may still see surprise medical bills despite the enactment of the No Surprises Act (NSA).

The article, entitled A Surprise-Billing Law Loophole? Her Pregnancy Led to a Six-Figure Hospital Bill, reports the story of a woman who was admitted for an extended inpatient hospital stay and follow-up postpartum procedure after experiencing a serious pregnancy complication. According to the article, the plan initially determined that the hospital was a nonparticipating provider, but the specialty clinic at which she was treated was in the carrier’s network. (The clinic’s doctors admitted patients only to the nonparticipating provider hospital.) The result was some $135,000 in uncovered expenses.

There are two relevant statutory provisions at play here:

The NSA provides protections against surprise medical bills for, among other things, nonemergency services furnished by nonparticipating providers with respect to a visit to a participating healthcare facility.
The Affordable Care Act (ACA) imposes limits on annual cost sharing, which includes deductibles, coinsurance, copayments or similar charges. Cost sharing does not, however, include balance billing amounts for non-network providers.

A great deal is riding on whether facilities and providers are participating or nonparticipating for NSA purposes, and whether providers are in or out of network for ACA purposes. If it is possible for a nonparticipating facility to have a participating provider, then there would seem to be a gap in the NSA’s protections. In the government’s view, this is not possible, so there is no gap.

The US Departments of Labor, Health and Human Services, and the Treasury (the Departments) weighed in on the issue in Q&As 1 and 2 of recently issued FAQs Part 60. According to the Departments, either:

The balance billing and cost-sharing protections under the NSA will apply because the items and services are furnished by a nonparticipating provider, emergency facility or provider of air ambulance services; or
The ACA limits will apply because the items or services are furnished by an in-network provider or provider of air ambulance services.

Under no circumstance, however, can a facility be a “participating” provider for NSA purposes and at the same time claim that they are not subject to the ACA out-or-pocket limits on in-network cost sharing.

The KFF/NPR article does not report the details about the underlying contractual arrangements. This might have been a health maintenance organization or other network-related plan, for example. The article does report that the balance bill was reversed, although no rationale is provided. The lesson here, according to the Departments, is that a plan or carrier cannot be in network for one purpose and out of network for other purposes to evade the surprise billing rules.

District Court Vacates Provisions of No Surprises Act Final Rule

by Debra Curtis, Kristen O'Brien and Erica Stocker | Mar 10, 2023 | Employee Benefits, Health and Welfare Plans

On February 6, a US district court in Texas vacated provisions of the No Surprises Act final rule related to the independent dispute resolution (IDR) process for determining payment for out-of-network services.

The district court granted summary judgment to the Texas Medical Association, which had brought suit against the US Departments of Health and Human Services (HHS), Labor and the Treasury over the IDR process. The district court held that provisions of the final rule were contrary to law and therefore in violation of the Administrative Procedure Act. The order vacated the provisions of the final rule that require IDR entities to look at the qualifying payment amount first and consider other factors only if those other factors are not already accounted for in the qualifying payment amount.

The departments have not yet filed a notice of appeal or amended their sub-regulatory guidance to align with the district court’s order.

Agencies Provide Guidance on Impending Transparency in Coverage Rule Implementation

by Marchan Clark and Jacob Mattinson | May 3, 2022 | Employee Benefits, Health and Welfare Plans

On April 19, 2022, the US Departments of Labor, Health and Human Services, and the Treasury (collectively, the Departments) released Frequently Asked Questions (FAQs) regarding the implementation of certain reporting provisions of the Affordable Care Act (ACA). The FAQs were released to provide clarity on the required drug price disclosures identified in the Transparency in Coverage final rule (the Rule) issued on October 29, 2020.

The Rule requires most non-grandfathered group health plans and health insurance issuers to: (1) upon request, disclose pricing information specific to participants, beneficiaries or enrollees (or their authorized representative) (collectively referred to herein as participants); and (2) provide public disclosures in machine-readable files regarding in-network, out-of-network and prescription drug prices. The Departments reiterated that the enforcement of the requirements related to machine-readable files disclosing in-network and out-of-network data will begin July 1, 2022 (enforcement of this part of the Rule related to prescription drugs has been delayed), and clear up confusion regarding reporting for certain alternative reimbursement arrangements.