Consumers can appeal health plan denials – NSA gives consumers the right to appeal health plan decisions to incorrectly deny or apply out-of-network cost sharing to surprise medical bills, first to the health plan, and then, if the plan upholds its decision, to an independent external reviewer. NSA interim final regulations added surprise bills to the scope of claims eligible for external appeal, which is otherwise limited to only denials based on medical necessity. NSA regulations made no other changes to current federal standards and processes that can limit consumer access to external appeal, including those that:
- require the health plan to determine which claims are eligible for external appeal
- require employer-sponsored health plans to contract with the external reviewer
- limit access to denial notices in another language for consumers with limited English proficiency
Federal appeals standards apply to most private health plans sponsored by employers, although in some states appeal rights are stronger for consumers in state-regulated health insurance.
Beyond these limitations, appeal rights may not help in many cases because consumers rarely appeal adverse determinations by their health plans. Data reported by qualified health plans sold on HealthCare.gov show less than 2/10 of 1% of denied claims are appealed internally to the health plan, and less than 3% of those appeals make it to external review. There is no reporting requirement specific to surprise medical bill claims and appeals for QHPs, and at present, federal law requirements on employer-sponsored health plans to report data on denied claims have never been implemented.
Consumers can contact “the applicable enforcement entity” when providers incorrectly bill – Providers are required to give consumers written notice describing their federal protections each time they provide a service protected under the NSA. The notice must include contact information for the applicable federal and state enforcement entities; although a provider that inappropriately balance bills for a service subject to the NSA might also fail to provide the required disclosure notice.
A national consumer complaints system will be established – The NSA requires HHS to establish a national complaints system for surprise medical bills, which is currently under development and scheduled to go live on January 1, 2022.
The toll free number for the “No Surprises Help Desk” will be 1-800-985-3059.
A central, no-wrong-door system is contemplated where consumers can register complaints regarding suspected violations by providers and facilities. The HHS system will also accept complaints related to suspected violations by health plans. It will coordinate with complaints systems operated by US DOL for group health plans and by OPM for the federal employee health plan and with state insurance regulators. Federal agencies are contemplating requirements to include contact information for the national Help Desk on other key documents, such as health plan EOBs, provider bills, or consent waiver forms.
The interim final regulations say HHS will respond to filed complaints within 12 weeks (60 business days), though agency staff have indicated that consumers will receive real-time confirmation when a complaint is filed. Agency staff also indicate plans to conduct preliminary review of complaints within 3 to 5 days of receipt to determine any additional information that may be needed to process the complaint. Once processed, HHS will refer the consumer to another Federal or State regulatory agency to investigate or, if applicable, inform the complainant of action HHS has taken to resolve the problem or refer the matter for enforcement. It is still to be determined whether HHS will track the outcome of complaints it refers to other agencies, or whether or how HHS will use the complaint system to track compliance by plans and providers or enforcement activities of states. HHS estimates the system will receive 3,600 provider-related complaints annually; it will cost an estimated $16 million to build the online complaints system and ongoing operating costs of $10 million annually.
Consumers can contact their state Consumer Assistance Program (CAP) – The Affordable Care Act (ACA) provided for the establishment of state ombudsman programs or CAPs to educate privately insured consumers about their health coverage and rights and to help consumers resolve problems with health plans, including filing appeals. Forty CAPs were established in 2010, though no federal CAP funding has since been appropriated. Most remain in operation today, at least at reduced levels, and help patients with medical bill problems, including surprise medical bills. Other legislation pending in Congress – the Build Back Better Act and the FY 2022 Labor-HHS appropriations bill – together could provide $75 million in new funding for CAPs in 2022, enabling states to establish new or expand existing programs. In addition to helping individual consumers resolve problems, CAPs are required to report to HHS on the kinds of problems consumers encounter. This data can inform oversight, as well as policy changes that can prevent problems from happening again. CMS staff indicate that the national surprise medical bill complaints system will also be able to refer complainants to the CAP in their state for local assistance.10
How will payments for surprise bills be determined?
The amount paid for surprise out-of-network surprise bills will likely end up close to the median rate that plans pay in-network providers in a geographic area, also known as the qualifying payment amount, or QPA.11 Under the law, the patient’s cost sharing for a surprise medical bill must be based on the QPA. Health plans and providers can negotiate privately over the amount to be paid for the surprise bill, and if they can’t agree, either party can ask for an Independent Dispute Resolution (IDR) process to decide the payment amount. However, there are strong incentives for both plans and providers to either rely on the QPA or on private negotiations.
The federal IDR process will be conducted by certified entities chosen by HHS and will resemble so-called baseball-style arbitration.12,13 The plan and provider will each submit their best offer for the out-of-network payment amount for a claim. The IDR entity begins with the presumption that the QPA is the correct amount but can consider other factors, including patient acuity, the level of training and expertise of the treating provider, the market shares of both parties, and past good faith efforts of both parties to reach a network agreement. The IDR entity then chooses the offer it determines to be most appropriate, which becomes the out-of-network payment for that bill. The IDR will charge a fee for each arbitration and the losing party must pay that fee. (IDR fees can range from $200 to $500 for a single case, and $268 to $670 for multiple or “batch” determinations.)14
In light of this process and incentives, HHS estimates the IDR process will be invoked for just over 17,300 surprise medical bill claims per year, and for another roughly 4,900 surprise air ambulance bills per year. The Congressional Budget Office also estimates this process will tend to have a dampening effect on the cost of surprise bills; CBO estimates the NSA will reduce private health plan premiums by 0.5% to 1% on average, and reduce the federal deficit by $17 billion over 10 years. Studies have found that surprise medical bills otherwise increase overall health insurance costs because the ability to balance bill gives certain providers and facilities leverage to negotiate much higher prices with insurers. To the extent that NSA moderates that dynamic, it can reduce health plan costs overall in addition to reducing out-of-pocket costs for individual patients.
Organizations representing providers and air ambulance companies have objected, however, and filed lawsuits urging that regulations should not have created a ‘rebuttable presumption’ in favor of the QPA. It remains to be seen if these actions may result in delayed implementation of the NSA or in changes to regulatory standards and procedures that could result in greater use of the IDR process or the determination of higher out-of-network payments.
The regulations also require detailed monthly reporting to HHS by IDR entities on the cases they receive. Data required to be sent to HHS includes specific information on the parties involved in each arbitration – including their names, market share, and other characteristic – and on the services involved – including the dollar amounts offered by each party, also expressed as a percentage of the QPA. HHS will compile data into quarterly reports that will be publicly available. These reports could provide an additional degree of transparency around surprise medical bills and the characteristics of plans and providers involved in surprise billing disputes.
Discussion
The No Surprises Act creates important new federal protections against surprise medical bills – a leading cause of affordability concerns for consumers. That this law passed with strong bipartisan support is an indication of the need for these protections. That federal agencies moved swiftly to implement the new law signals intent to make it work as effectively as possible.
The law is highly complex, however, setting coverage and billing standards for a specific subset of private insurance claims that could number 10 million annually. Providers are permitted to ask consumers to waive their NSA protections in some cases. Oversight and enforcement will be conducted by an array of federal and state agencies, some of which are still to be determined, and more than one of which could be involved in any given case of noncompliance.
Monitoring of the law’s impact, as well as compliance, will be accomplished in various ways. Data reporting by IDR entities will provide some information about prices for surprise bills and the characteristics of plans and providers using the IDR process. Annual health plan audits conducted by federal agencies can also yield information about prices charged and paid for surprise bills. Other targeted audits and investigations can yield information about compliance generally, as can new federal consumer complaints systems. State systems may also yield important data as to how the law is working, such as state complaints systems and analysis of data from all-payer-claims databases. It remains to be seen how these new systems will work, independently and in coordination.
To a large extent, oversight and enforcement will rely on complaints. In order to complain, though, consumers will need to understand that they should not be overbilled for emergency services or for non-emergency out-of-network services while they are in in-network hospitals and facilities. How public education will be conducted, and how public understanding of new rights will be monitored is yet to be determined. The responsiveness of new complaints systems and how they coordinate will also be important to watch.
Finally, it remains to be seen if any other tools will be employed to monitor trends in the incidence of surprise medical bills, and how effectively the law may work to protect consumers from surprise bills and reduce their out-of-pocket costs. For example, might the federal government exercise its broad authority under the ACA to require transparency data reporting by private health plans? This authority could be used to monitor the incidence of surprise medical bills over time, as well as differences between the QPA and billed or paid out-of-network charges; it could also be used to monitor how frequently providers use consent waivers. Or, will state consumer assistance programs be employed to play a role in educating the public, reporting to regulators on problems that arise and how they might be prevented in the future?
As implementation proceeds (and as federal courts consider legal challenges to the regulations) it is also possible that NSA standards and procedures will be modified further.
