HHS: New rule limits balance billing, creates processes for calculating out-of-network payment for emergency services

Balance billing for emergency services and certain other services will be subject to new limitations, according to an interim final rule with comment period (IFC) released July 1 by HHS.

The IFC, Requirements Related to Surprise Billing; Part I, implements some requirements of the No Surprises Act. The law aims to protect individuals from surprise billing, often in the form of balance billing, and excessive cost-sharing and applies to payer and provider organizations. This IFC specifically focuses on protections from surprise billing for emergency services, air ambulance services provided by out-of-network providers, and nonemergency services provided by out-of-network providers at in-network facilities under certain circumstances.

If an individual has health coverage that offers any benefits for emergency services, the IFC requires emergency services to be covered without prior authorization, regardless of whether the provider or facility is in-network, and regardless of most other terms and conditions of the coverage. Cost-sharing for out-of-network services covered by the IFC is limited to no higher than in-network levels and must count toward in-network deductibles and out-of-pocket maximums.

The IFC also includes parameters for calculating cost-sharing. For emergency services provided by out-of-network emergency facilities and out-of-network providers, and for some nonemergency services provided by out-of-network providers at in-network facilities, cost-sharing must be calculated based on an amount determined by an applicable All-Payer Model Agreement under section 115A of the Social Security Act or, if there is no applicable All-Payer Model Agreement, an amount determined under a specified state law. If neither circumstance applies, the amount used must be the lesser amount of either the billed charge or the qualifying payment amount, generally the health plan’s median contracted rate.

For out-of-network rates, the total amount to be paid to the provider organization, including cost sharing, is determined using one of the following three methods:

1. An amount determined by an applicable All-Payer Model Agreement
2. If there is no All-Payer Model Agreement, an amount determined by state law
3. If there no All-Payer Model Agreement or state law, an amount agreed upon by the health plan and the facility or provider

If none of the three conditions apply, the amount must be determined by an independent dispute resolution entity.

The IFC also includes an exception that allows a provider or facility to notify individual of potential out-of-network care and obtain the individual’s consent that care and extra costs. The exception does not apply to many situations when surprise bills are likely to be generated, such as ancillary services connected to nonemergency care.

The IFC is effective January 1, 2022. Comments on the IFC will be due by 5 p.m. 60 days after it is published in the Federal Register. See the fact sheets for more information.