On the Friday before the July Fourth weekend, the U.S. Departments of Health and Human Services (HHS), Treasury and Labor issued an interim final regulation implementing Part 1 of the No Surprises Act, which Congress passed in December 2020. The legislation bans balance billing for out-of-network services starting in 2022 to protect patients and establishes a baseball arbitration-style independent dispute resolution (IDR) process to allow physicians and insurers to resolve their payment differences.

The California Medical Association (CMA) has been advocating for physicians on both the state and federal level to ensure there is a fair process for physicians to be appropriately paid for out-of-network services and to incent insurers to contract in good faith. A balanced process will also protect patient access to emergency and on-call services.

Overall, CMA continues to believe that the No Surprises Act is a mostly balanced solution, particularly given the earlier iterations of Congressional legislation that would have set a national fee schedule at the median contracted rate without any dispute resolution process. 

CMA met with officials at HHS to discuss the implementing regulations and to share the California experience. CMA also developed joint comments with the American Medical Association (AMA) task force to ensure a unified response. However, there are still serious concerns with the implementing regulation that CMA will be working to address.    

These regulations are mostly intended to address the “qualifying payment amount” (QPA) which is the median contracted rate paid by the health plans as of January 31, 2019. The QPA is used for two purposes: (1) to determine cost-sharing requirements for patients if an all-payor model or specified state law does not apply; and (2) to be one factor considered by the arbitrator during the IDR process to determine the total payment for out-of-network services.

The rule also outlines the circumstances under which state and federal balance billing laws apply. In addition, there are guidelines related to the patient notice and consent requirements for physicians who are allowed to balance bill patients, disclosure requirements for health plans and providers, and the procedures related to the enforcement audits on the health plans.  

CMA is reviewing the nearly 500-page document and will be submitting comments which are due September 7, 2021. For a brief overview of the regulations, click here. A more detailed summary will be published soon.

Part 2 of the implementing regulations will address the IDR process and the network adequacy studies and is due to be released later this year.