Second Surprise Billing Rule Covers Dispute Resolution Processes, Good Faith Estimates for the Uninsured

October 12, 2021

On September 30, 2021, the U.S. Department of Health and Human Services (HHS), the Department of Labor, and the Department of the Treasury (“the Departments”), along with the Office of Personnel Management (OPM), released an interim final rule with comment period, entitled “Requirements Related to Surprise Billing; Part II.” This rule is related to Title I (the No Surprises Act) of the Consolidated Appropriations Act, 2021, and implements additional protections against surprise medical bills under the No Surprises Act, including provisions related to the independent dispute resolution process, good faith estimates for uninsured (or self-pay) individuals, the patient-provider dispute resolution process, and expanded rights to external review.

Independent Dispute Resolution

The rule establishes the federal independent dispute resolution (IDR) process that out-of-network (OON) providers, facilities, providers of air ambulance services, plans, and issuers in the group and individual markets may use to determine the OON rate for applicable items or services after an unsuccessful open negotiation. This process applies only to those services for which balance billing was prohibited under the “Requirements Related to Surprise Billing; Part I” rule.

First, disputing parties initiate a 30-day “open negotiation” period to attempt to determine a payment rate. If these negotiations fail, either party may start the IDR process. The provider and payer may jointly select a certified IDR entity; if they cannot jointly agree, the Departments will make the selection. The parties then submit their offers for payment with supporting documentation. This rule confirms that IDR entities in general should presume that the qualifying payment amount (QPA)—generally the plan’s or issuer’s median contracted rate—is the appropriate OON amount, a position supported by insurers and broadly opposed by provider groups. The IDR entity then issues a binding determination by selecting one of the parties’ offers as the OON payment amount (the party whose offer is not chosen will also be responsible for the certified IDR entity fee).

Good Faith Estimates for Uninsured (or Self-pay) Individuals – Requirements for Providers and Facilities

When scheduling an item or service, or if requested by an individual, providers and facilities are required to inquire about the individual’s health insurance status or whether an individual is seeking to have a claim submitted to their health insurance coverage for the care they are seeking. The provider or facility must provide a good faith estimate of expected charges for items and services to an uninsured (or self-pay) individual.

The good faith estimate must include expected charges for the items or services that are reasonably expected to be provided together with the primary item or service, including items or services that may be provided by other providers and facilities.  For example, for a surgery, the good faith estimate might include the cost of the surgery, any labs or tests, and the anesthesia that might be used during the operation. If an item or service is something that isn’t scheduled separately from the surgery itself, it will generally be included in the good faith estimate. Other items or services related to the surgery that might be scheduled separately, like pre-surgery appointments or physical therapy in the weeks after the surgery, won’t be included in the good faith estimate.

If an uninsured/self-pay consumer requests a good faith estimate, it must be provided within three business days. However, the good faith estimate must be provided within one business day after scheduling (applies when the primary item or service is scheduled at least three business days before receipt) or no later than three business days after scheduling (applies when the primary item or service is scheduled at least 10 business days before receipt).

Patient-Provider Dispute Resolution

The rule also establishes a patient-provider dispute resolution process to determine a payment amount. A patient’s bill will be determined eligible for the patient-provider dispute resolution process if the patient received a good faith estimate, if the process is initiated within 120 calendar days of the patient receiving the bill, and if the bill is substantially in excess of the good faith estimate (defined by HHS as the billed charges being at least $400 more than the good faith estimate for any provider or facility listed on the good faith estimate).

Select dispute resolution (SDR) entities will make payment determinations as part of the patient-provider dispute resolution process. The patient-provider dispute resolution process has timelines for documentation submission and payment determination, and participating individuals will be charged an administrative fee; the fee will be set at $25 in the first year and will be updated through sub-regulatory guidance in future years.

External Review

The rule expands the scope of adverse benefit determinations eligible for external review to include determinations that involve whether a plan or issuer is complying with the surprise billing and cost-sharing protections under the No Surprises Act and its implementing regulations. In addition, under these rules, grandfathered plans that are not otherwise subject to external review requirements will 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.

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