Hospitals may hit a wall with the part of the No Surprises Act that requires them to give uninsured and self-pay patients a good-faith cost estimate of all services provided in connection with an episode of care within a margin of error of $400 after Jan. 1, 2023. Co-providers are supposed to produce cost information about scheduled office visits, diagnostic tests and procedures within one day at the request of hospitals (and other “convening” providers), but it’s unclear, in the absence of CMS guidance, what leverage they have.
“What if other providers won’t cooperate with the convening provider? There’s no guidance on what people will do,” said Martie Ross, a consulting principal at PYA. “If a co-provider does not respond with its charges, is the convening provider required to provide some estimate of those charges as part of its good-faith estimate? If so, is the convening provider potentially liable if such estimate proves inaccurate?” Conversely, there’s the question of what happens if the convening provider fails to contact a co-provider and therefore doesn’t include its charges in the good-faith estimate. “Is the convening provider then potentially liable for those charges?”
Hospitals and other facilities are already required to come up with good-faith estimates of their own services, but the convening provider part adds another dimension and, along with other aspects of the good-faith estimate requirement, including how to decide on charges for patients who have high-deductible insurance, that raises questions without satisfying answers yet, Ross said.
Hospitals are awaiting more guidance on the good-faith requirement, which is “one of two distinct regulatory schemes living under” the No Surprises Act, Ross said May 11 at a webinar sponsored by PYA.[1] The other is the ban on surprise billing. They’re both complex and challenging, but Ross said “there are far more questions on the good-faith requirement than on surprise billing.”
Good-Faith Estimates Have Twists
The No Surprises Act protects patients from large or unexpected bills from out-of-network providers when they’re treated at hospitals, ambulatory surgery centers and other facilities, depending on the circumstances. The law limits patient liability for out-of-network services to no more than in-network cost sharing and deductibles. In other words, balance billing isn’t allowed when patients receive emergency services at out-of-network hospitals or nonemergency services from out-of-network providers at certain in-network hospitals and other facilities. It applies to commercial payers, not Medicare and Medicaid. To ensure hospitals and physicians are protected as well, health plans and insurers must reimburse them directly for out-of-network care. There’s a dispute resolution process for providers and payers to settle payment disputes about out-of-network services.
Include Providers Who Bill Under Your NPI
Three regulations issued mainly by HHS and the departments of Labor and the Treasury implement the No Surprises Act: two interim final rules published July 13[2] and Oct. 7[3] and a proposed rule on enforcement issued Sept. 16.[4] “It’s a pretty interesting compliance/operations interface,” Ross said. “Compliance people are responsible for cracking open the rules and talking to operations” about putting the pieces in place. But they’re on a very tight deadline in the middle of a pandemic. The rules took effect Jan. 1, 2022, only a few months after the regulations were unveiled. By comparison, “we had two years to do HIPAA,” Ross noted.
Unlike the surprise billing ban, the good-faith cost estimate requirement applies to all providers. Cost estimates are sent to health plans if patients have insurance and to patients if they’re uninsured or self-pay, although HHS delayed the deadline for sending cost estimates to health plans for patients using insurance until rulemaking is completed. CMS also delayed until Jan. 1, 2023, enforcement of the requirement that the good-faith estimate include all costs associated with the episode of care (both the convening provider’s and co-providers’ charges).
For now, facilities only must provide cost estimates of the services they provide (e.g., a hip replacement). That includes the costs of services provided by anyone under your umbrella, such as hospital-employed physicians. “For now, you only have to worry about who bills under your national provider identifier,” Ross explained. “Anyone who you are billing for should be included in the good-faith estimate.”
‘What Do You Charge that Patient?’
Figuring out whom providers must produce a good-faith estimate for also can be challenging. “That’s easy when the person doesn’t have insurance,” she said. “It gets tricky when the person has insurance, but you know at the time the request is made [that] insurance won’t cover it.” For example, many dermatology procedures are covered, and many aren’t, Ross said. If they’re not covered, hospitals and physicians may be unsure what costs to include in the estimate.
Similarly, some insured patients have high-deductible health plans and pay out of pocket for the first $3,000 or $5,000 of their care, she said. “What do you charge that patient? Are they considered self-pay even though they have insurance” because they are paying out of pocket during the deductible period? “The definition of ‘self-pay’ is inexact in application,” Ross said. Should the hospital base a good-faith cost estimate on the chargemaster rate or the patient’s health plan-negotiated rate, which may be half the chargemaster rate, even though the patient still hasn’t met the deductible? “There are instances where the cash pay discount is lower than the negotiated rate,” she said. Without CMS guidance, “take your best guess.” Ross doesn’t expect CMS to offer up scenarios. However, it has answered a “when” question in its frequently asked questions on the good-faith cost estimate requirement.[5] “In situations where a provider or facility who has previously determined that an individual was not uninsured (or self-pay) becomes aware that an individual is uninsured (or self-pay) fewer than 3 business days in advance of the scheduled furnishing of items or services, nothing in the GFE regulations at [45 C.F.R. § 149.610] require that the provider or facility provide a GFE to such an individual, or reschedule an appointment to allow for the provision of a GFE to such an individual,” CMS said.
What if the patient’s bill is more than $400 above the hospital’s or other provider’s good-faith estimate? Patients are empowered to request resolution through a selected dispute resolution (SDR) entity. If the entity agrees with the patient that the provider’s estimate wasn’t made in good faith, the provider is bound by it. She noted that “the convening provider is not responsible to the patient to ensure the total amount of the good-faith estimate—for the convening provider and the co-provider—is within $400 of the total amount of all providers’ charges.” Although charges are presented in a single good-faith estimate, each provider’s charges stand on their own for purposes of the SDR process.
The big lesson: “Self-pay is not uninsured,” Ross said. And the good-faith estimate obligation is about helping patients do comparison shopping. It’s not just a scheduling thing.
IDR Portal Is Open for Business
On the surprise billing side of the equation, Ross said hospitals may still be in the dark about how much they’re getting paid for services provided by out-of-network providers because things are still in flux. The No Surprises Act created the qualifying payment amount (QPA) to calculate the patient’s cost-sharing amount. It’s the plan’s median contracted in-network rate for the specific service furnished in the patient’s geographic area as of Jan. 1, 2019, adjusted for inflation. That sets in motion a process for the payer and provider to negotiate a payment.[6] When providers and payers can’t agree on a payment for an out-of-network provider, they jointly pick an independent dispute resolution (IDR) entity to settle the dispute. After hearing from the plan and the provider, an arbitrator will pick a winning bid. In making their decision on the out-of-network payment, IDR entities consider the QPA and seven other factors (e.g., the patient’s acuity and complexity of the services provided). The Oct. 7 IDR regulation required arbitrators to presume the bid closest to the QPA is the correct one, which favors insurers (in the eyes of providers). They took the federal agencies to court, and in one lawsuit, a federal judge in Texas sided with the Texas Medical Association Feb. 23 and invalidated the presumption in favor of the QPA.
As a result, IDRs are moving forward without deciding cases based on the QPA presumption. CMS appealed the Texas court ruling but then got a stay of the appeal from the U.S. Court of Appeals for the Fifth Circuit pending publication of additional No Surprises Act regulations this summer. It’s possible that will give CMS time to address problems around the QPA and good-faith estimate requirement, she added. The IDR portal is now open for business.
CMS Sent Enforcement Letters to the States
Things are still falling into place on the enforcement side of the No Surprises Act. “There are pre-No Surprises Act state laws that complicate the field,” said attorney Hana Crandall, with Robinson Bradshaw, at the webinar. Generally federal laws preempt state laws, but Congress in this context opted to defer to state laws that are more protective than the No Surprises Act. However, if state laws are less protective, the No Surprises Act applies. Both may apply if the state method for interpreting payment is not comprehensive, she said.
The federal government will step in if states are unable or unwilling to enforce the provisions of the law, Crandall said. Or “they can share it through collaborative enforcement,” she said. “CMS issued enforcement letters for almost all states that describe whether the states or CMS will be enforcing certain provisions of the [No Surprises Act], what dispute resolution procedures may apply, and whether that state will enter into a collaborative enforcement agreement. The letters can be used as a resource for providers and health plans looking to learn more about the structure of government enforcement in their area.”[7]
Contact Ross at mross@pyapc.com and Crandall hcrandall@robinsonbradshaw.com.