2023 surprise billing final rule implements the No Surprises Act

Wednesday, September 7, 2022

HHS recently released final rules for implementing components of the No Surprises Act. These rules expand upon several provisions of the July 2021 and October 2021 interim final rules regarding the qualified payment amount (QPA) and the federal independent dispute resolution (IDR) process.

The final rules require additional documentation regarding the QPA. The QPA is the insurer’s median in-network rate for the same or similar service, at the same or similar facility, by a provider of the same or similar specialty, and in the same or similar geographic area.

The rules state that the QPA will no longer be the presumptive factor in payment determinations. Instead, certified IDR entities must first consider the QPA, and then “must consider all additional information submitted by a party to determine which offer best reflects the appropriate out-of-network rate.”

According to the final rules, certified IDR entities should choose “the offer that best represents the value of the item or service under dispute after considering the QPA and all permissible information submitted by the parties.”

If a QPA is based on a downcoded service code or modifier, the payer must provide the following in addition to its initial payment or notice of denial:

  • A statement saying the service code or modifier was downcoded
  • An explanation of why the claim was downcoded, including a list of any altered, added, or removed service codes or modifiers
  • The amount the QPA would have been if the service code or modifier was not downcoded

The concept of downcoding was included in the 2021 interim final rules, however the term was specifically defined for the first time in the recently released final rules.

To comply with the final rules, certified IDR entities must submit a written statement to HHS and the parties involved with their reasoning behind out-of-network rates for all cases. The written decision must include information that proves the selected out-of-network rate represents the value of the qualified IDR item or service, as well as the weight given to the QPA.

These final rules are meant to address “only certain issues critical to the implementation and effective operation of the federal IDR process.” They also said the rules are “purposefully narrow in scope,” but they intend to publish future guidance on topics such as auditing payer QPAs, defining ancillary services in terms of the balance billing notice and consent exception, and good faith estimates.

The final rules for implementing these components of the No Surprises Act are effective on October 25.

Editor's note: Find more NAHRI rescourses on the No Surprises Act here.