Feds provide payment resolution process in new surprise billing rule

Federal agencies have issued a new interim final rule that details the payment dispute resolution process under the No Surprises Act.

The act, which was signed into law last December, bans surprise billing, that is when patients are unexpectedly charged for out-of-network care.

Today’s rule removes consumers from the equation and lays out how healthcare providers, air ambulance service companies and health plans can negotiate reimbursement for out-of-network bills when they disagree on the payment arrangement.

Here are the key steps organizations must take under the new rule:

1. Prior to initiating a federal dispute resolution process, the parties must participate in a 30-day open negotiation to determine a payment rate.

2. If the open negotiation fails, either party may initiate the dispute resolution process.

3. The parties must then jointly select a certified independent dispute resolution entity. This entity and its personnel must attest that they have no conflicts of interest with either party. If the parties cannot decide on an entity or if the selected entity has a conflict of interest, the government will select one.

4. The parties will then submit their offers for out-of-network payment along with supporting documentation.

5. The dispute resolution entity will issue a binding determination selecting one of the parties’ offers as the out-of-network payment amount.

Both parties must pay $50 in administrative fees for 2022, and the party whose offer is rejected is also responsible for the dispute resolution entity fee.

This process applies only to those services for which surprise billing is prohibited, including emergency services and ancillary care at an in-network facility.

In addition to detailing the payment dispute process, the new rule protects uninsured individuals from unexpected medical bills by requiring providers to give them good faith estimates of expected charges after a service is scheduled or if they request it.

This estimate should include expected charges for the primary service and charges for any other services that would be expected to be provided as part of the patient’s care.

People who are charged $400 more than the good faith estimate can initiate a dispute resolution process of their own, which will involve a third-party dispute resolution organization reviewing the good faith estimate, the bill and information submitted by the patient and provider to determine if the additional charges are allowed.

Finally, the new rule expands the scope of the external review process, which is what individuals with group or individual health coverage can use to appeal a payment denial.

So, for example, if a person whose health plan covers emergency care under the No Surprises Act goes to an emergency room and then receives a claims denial from their health plan, the person could appeal the decision using the external review process.

This is the third rule that the Departments of Health and Human Services, Labor and Treasury, and the Office of Personnel Management have issued to implement the No Surprises Act. Prior rulemaking includes provisions to collect data on the air ambulance provider industry and consumer protections against surprise billing.

These rules take effect on Jan. 1, 2022.

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