Regulatory Resources

Federal Agencies Issue FAQs on No Surprises Act and Transparency in Coverage Implementation

On August 19, 2022, the Departments of Labor (DOL), Health and Human Services (HHS), and Treasury jointly released guidance on the No Surprises Act (NSA) and Transparency in Coverage (TiC) rules implementation. These Frequently Asked Questions – Part 55 (FAQs) are related to certain provisions of the Affordable Care Act (ACA) and the No Surprises Act.

These FAQs provide guidance on the following topics:
  • Applicability to No–Network and Closed Network Plans: The balance billing prohibitions of the No Surprises Act apply to nonparticipating providers, emergency facilities, and providers of air ambulance services when providing emergency services or air ambulance services to a member covered under a group health plan (when such benefits are provided under the plan) that does not have a network of providers, such as a plan that utilizes reference–based pricing (RBP).
  • Calculating Cost Share under No–Network Plans: If a plan or insurer does not have sufficient information to calculate a median contracted rate, including because the plan or insurer does not have a network of participating providers for the item or service involved, the plan or insurer must calculate the QPA using an eligible database, in accordance with the regulations.
    • Example: Person X is enrolled in a group health plan that does not have a network of providers or facilities. Under the terms of the plan, the plan pays a reference–based amount, based on a fee schedule, for items and services covered under the plan. Participants generally are responsible for the difference between the provider’s or facility’s billed charge and the payment amount set under the plan. The plan applies a deductible, after which the plan does not impose cost sharing for covered services. Person X has satisfied the deductible for the current plan year. Person X is taken to a hospital emergency room for emergency services, and the facility sends the plan a bill for $1,200 for CPT code 99282. There is no All–Payer Model Agreement or specified state law that is applicable with respect to the plan. Under the plan’s terms, the plan would pay a reference–based amount of $800 for CPT code 99282 after the deductible is satisfied.
    • Conclusion: Under the No Surprises Act, the emergency facility is prohibited from billing Person X for an amount that exceeds Person X’s cost–sharing requirement. Person X’s cost–sharing requirement must be calculated as if the total amount that would have been charged for the services by the nonparticipating emergency facility was equal to the recognized amount for the services. Since neither an All–Payer Model Agreement nor a specified state law applies, the plan must calculate the recognized amount using the QPA. Because the plan does not have a network from which to calculate median contracted rates, the QPA is calculated using an eligible database. Using an eligible database, the plan determines the applicable QPA is $900. Because Person X’s deductible has been satisfied and the plan does not impose other cost–sharing requirements for emergency services, Person X owes no cost sharing and cannot be billed or held liable for the $400 difference between the amount billed by the facility ($1,200) and the plan’s reference–based amount ($800).
  • Calculating the Out–of–Network Rate under No Network Plans: If an All–Payer Model Agreement or specified state law does not apply, the out–of–network rate is the amount the nonparticipating provider, emergency facility, or provider of air ambulance services and the plan or insurer agree upon as the amount of payment for the item or service (including if the amount agreed upon is the initial payment sent by the plan or insurer or is agreed upon through negotiations with respect to such item/service). However, if the parties enter into the IDR process and do not agree upon a payment amount before the date on which the IDR entity makes a determination, then the amount determined by the IDR entity is the out–of–network rate. As a result, a plan that utilizes a reference–based pricing structure and does not have a network of providers may be required to make a total payment that is different than the plan’s RBP amount for items and services that are subject to the NSA.
  • Applicability of ACA Maximum Out–of–Pocket (MOOP) Requirements to Items and Services Subject to NSA for a Non–Grandfathered Large Group or Self–Insured Group Health Plan with No Network of Providers: “Emergency services” are now defined in 26 CFR 54.9816–4T(c)(2), 29 CFR 2590.716–4(c)(2), and 45 CFR 149.110(c)(2) to include certain items and services furnished after the patient is stabilized. Additionally, post–stabilization services are excluded from the definition of “emergency services” under the No Surprises Act if all conditions under 45 CFR 149.410(b) are met . The new definition of “emergency services” reflects that, when patients receive these post–stabilization services, they may not have an opportunity in the time between identification of the need for care and provision of the care to seek a participating provider (and be protected from out–of–network cost sharing and balance billing). Therefore, limiting or excluding out–of–pocket spending from counting toward the MOOP with respect to providers that do not accept the reference–based price would not be considered reasonable with respect to post–stabilization services that are included in the definition of “emergency services”.
  • Applicability of NSA to a Group Health Plan that Generally does not Provide Out–of–Network Coverage: The NSA protections regarding emergency services, non–emergency services furnished by a nonparticipating provider with respect to a visit to a participating facility, and air ambulance services apply if those services are otherwise covered under the plan, even if the plan otherwise does not provide coverage for out–of–network items or services. If a plan or insurer provides or covers any benefits with respect to services in an emergency department of a hospital or with respect to emergency services in an independent freestanding emergency department, the plan or insurer must cover emergency services, including on an out–of–network basis, in accordance with the NSA. Similarly, if a plan or insurer provides or covers benefits with respect to non–emergency items and services, the plan or insurer must cover the items or services furnished to a participant by a nonparticipating provider with respect to a visit at a participating health care facility in accordance with the NSA. Finally, if the plan or insurer provides or covers any benefits for air ambulance services, the plan or insurer must cover such services from a nonparticipating provider of air ambulance services in accordance with the NSA. These requirements may result in a plan or coverage providing benefits for out–of–network items and services subject to the NSA, even if the plan or insurer otherwise would not provide coverage for these items or services on an out–of–network basis.
  • Applicability of NSA to Air Ambulance Services if Plan or Insurer Only Covers Emergency Air Ambulance Services: If non–emergent air ambulance services (such as non–emergent inter–facility transports) are not covered under the terms of a plan, the NSA does not require the plan or insurer to cover those services or limit the amount a participant may be charged for those services.
  • Applicability of NSA to Air Ambulance Services Furnished by a Nonparticipating Provider of Air Ambulance Services when the Point of Pick–Up is Outside of the U.S.: The protections of the NSA prohibit surprise medical bills for air ambulance services (when such benefits are available under the plan), when the air ambulance services are furnished by a nonparticipating provider of air ambulance services that is licensed under applicable state and federal law to provide such services, even if the point of pick–up is in a jurisdiction outside of the United States.
  • Identifying the Geographic Region Used to Calculate the QPA for Air Ambulance Services when the Point of Pick–Up is Outside the U.S.: The July 2021 interim final rules do not currently provide for geographic regions outside of the United States. In future rulemaking, the Departments intend to address the geographic region to be used to calculate the QPA for air ambulance services when the point of pick–up is in a jurisdiction outside of the United States. Until that rulemaking is finalized and effective, plans and insurers are expected to use a reasonable method to determine which geographic region applies for purposes of calculating the QPA. For example, the Departments will consider a plan or insurer to have used a reasonable method if the plan or insurer identifies the relevant geographic region based on the border point of entry to the United States following patient pick–up.
    • Example: A nonparticipating provider of air ambulance services is dispatched from Florida to pick up an individual experiencing a medical emergency in the Bahamas, and transports the individual back to a hospital in the United States, entering the United States through the Miami–Fort Lauderdale–West Palm Beach metropolitan statistical area (MSA). The nonparticipating provider of air ambulance services submits a claim to the individual’s plan or insurer for the services. The plan or insurer determines that the air ambulance services are a covered benefit under the terms of the individual’s coverage. The plan or insurer could reasonably calculate the QPA for the air ambulance services using the geographic region that corresponds to the United States border point of entry, which in this case would be the region consisting of all MSAs in Florida, provided the plan or insurer has sufficient information to calculate a median contracted rate for that region.
  • Applicability of the NSA to Emergency Services Furnished with Respect to a Visit to a Behavioral Health Crisis Facility: To the extent that services provided in response to a behavioral health crisis meet the definition of “emergency services”, and are provided with respect to a visit to a facility that meets the definition of an “emergency department of a hospital” or an “independent freestanding emergency department”, as those terms are defined under the July 2021 interim final rules, these services are subject to the surprise billing protections in the NSA. In addition, to the extent that a medical screening examination and stabilizing treatment provided in response to a behavioral health crisis meet the definition of “emergency services”, and are provided in an outpatient department of a hospital, these services are also subject to the surprise billing protections. This is true regardless of whether the license issued to the facility uses the term “hospital emergency department” or “independent freestanding emergency department” and regardless of whether the license issued to the facility uses the term “emergency services” to describe the services the facility is licensed to provide. For example, if under state licensure laws, a facility that provides behavioral health crisis response services is permitted to provide emergency services, and is geographically separate and distinct from a hospital, then such a facility would fall within the definition of “independent freestanding emergency department”, and the surprise billing protections would apply to emergency services provided by such facility.
  • Posting Model Disclosure Notice Regarding Patient Protections Against Surprise Medical Billing on Public Website of the Plan: If a group health plan does not have a website, the plan may satisfy the requirements to post the Model Disclosure Notice on its public website, by entering into an agreement under which a plan’s health insurer or TPA, as applicable, posts the information on its public website where information is normally made available to participants on the plan’s behalf. The Departments note this guidance applies in instances in which the plan sponsor (for example, an employer) may maintain a public website, but the group health plan sponsored by the employer does not. If the plan enters into a written agreement under which a health insurer or TPA agrees to post the required information on its public website on behalf of the plan, and the health insurer or TPA fails to do so, the plan violates the disclosure requirements.
  • Provision of Information on all State Laws Regarding Balance Billing: The statute requires plans and insurers to provide information only on applicable state laws regarding out–of–network balance billing. The Departments will consider a plan or insurer to be in compliance if the plan’s or insurer’s disclosure includes information on state laws applicable to balance billing that apply with respect to participants in such coverage. The Departments do not expect a plan or insurer to provide information on state laws that do not apply to a particular participant that is enrolled in the plan.
  • Model Disclosure Notice: The Departments will consider plans’ and insurers’ use of either the initial (see Appendix I) or revised (see Appendix III) version of the model disclosure notice to be in good faith compliance for making disclosures with respect to plan or policy years beginning on or after January 1, 2022, and before January 1, 2023. However, the Departments will consider plans’ and insurers’ use of only the revised version of the model disclosure notice (see Appendix IV) to be good faith compliance for disclosures with respect to plan or policy years beginning on or after January 1, 2023.
  • Separate Calculation of Median Contracted Rate for each Provider Specialty, When Plan’s or Insurer’s Contracted Rates for Service Codes Vary Based on Provider Specialty: If a plan or insurer has contracted rates that vary based on provider specialty for a service code, the median contracted rate (and consequently the QPA) must be calculated separately for each provider specialty, as applicable. Plans and insurers are required to calculate separate median contracted rates by provider specialty both in instances where their contracting process purposefully sets different rates for different specialties and in instances where the contracting process otherwise results in different rates for different specialties.
  • Calculation of QPA for Self–Insured Group Health Plans that Offer Multiple Benefit Package Options Administered by Different TPAs: If a single self–insured group health plan offers multiple benefit package options administered by different TPAs, the plan may allow each TPA acting on behalf of the plan to calculate a median contracted rate separately for those benefit package options administered by the TPA. In other words, contracted rates would not have to be aggregated across multiple mutually–exclusive benefit package options administered by different TPAs to calculate a median contracted rate. For example, if a self–insured plan offers participants a choice of two benefit packages, Option A administered by TPA A and Option B administered by TPA B, the QPA for an item or service may be calculated separately for Option A and Option B, determined with respect to all self–insured group health plans administered by the same TPA (including from other plan sponsors).
  • Posting the Machine Readable Files on a Public Website: If a group health plan does not have its own public website, nothing in the TiC Final Rules requires the plan to create its own website for the purposes of providing a link to a location where the machine–readable files are publicly available. The Departments note this guidance applies in instances in which the plan sponsor (for example, the employer) maintains a public website, but the group health plan sponsored by the employer does not. Instead, a plan may satisfy the requirements by entering into a written agreement under which a service provider (such as a TPA) posts the machine–readable files on its public website on behalf of the plan. In the case of aggregated Allowed Amounts files, however, the plan must post a link to the file hosted by the service provider on the plan’s own website, if the plan maintains a public website. If a plan enters into an agreement under which a service provider agrees to post the machine–readable files on its public website on behalf of the plan, and the service provider fails to do so, the plan violates the disclosure requirements.
  • Updates to List of Codes for Items and Services Required in the Self–Service Tool: The Departments will update the list of 500 items and services that must be included in the first phase of implementation of the internet–based self–service tool quarterly, to reflect the retirement of any codes that were included in Table 1 in the preamble to the TiC Final Rules list and will provide a reasonable period of time for plans and insurers to update their internet–based self–service tools to reflect the current codes. Plans and insurers should refer to www.cms.gov/healthplan-price-transparency/resources/500-items-services for the most up–to–date list of codes to comply with the requirements beginning on or after January 1, 2023 and prior to January 1, 2024.