5 Things Rev Cycle Leaders Need to Know About the Surprise Billing Interim Final Rule

Understanding the qualifying payment amount and the initial information on the independent dispute resolution process "should be a short-term priority for revenue cycle leaders and their teams," says attorney Harvey Rochman.

Earlier this month, the federal government released an interim final rule outlining certain provisions of the No Surprises Act (NSA), which is designed to protect patients from surprise medical bills and balance billing.

Although the interim final rule outlined some of what's needed to comply with the No Surprises Act , there are still lots of open questions for revenue cycle leaders.

"Revenue cycle leaders need to be highly focused on NSA implementation, which will have major impacts on hospital operations and will require many new processes and strategies to be implemented in the next six months," Harvey Rochman, a litigation partner at Manatt, Phelps & Phillips, LLP, told HealthLeaders via email. "This will require a huge effort and substantial resources and will have impacts on revenue that are not yet known."

Here, Rochman shares five details from the interim final rule that revenue cycle leaders need to watch carefully.

1. The rule outlined some important provisions:

The interim final rule "provides revenue cycle leaders with important additional information needed for compliance with key aspects" of the No Surprises Act, according to Rochman.

"This includes:

• The scope of covered emergency services, including post-stabilization services.
   
• The extent to which state law (rather than the NSA) will apply.
   
• How the plans must calculate the Qualifying Payment Amount (QPA).
   
• The notice-and-consent process, which is required for an out-of-network provider to bill a patient covered by the NSA in excess of the patient's applicable in-network cost-share."

2. Revenue cycle leaders need a good handle on the QPA and notice-and-consent process:

"The QPA is the median contracted rate paid by the patient's plan in 2019 for the item or service in the applicable geographic region (increased for inflation)," according to Rochman. "Revenue cycle leaders will want to fully understand how the QPA is calculated so they can evaluate plan calculations and establish processes to maximize revenue." 

"The QPA will frequently be the basis for calculating the patient's cost share for out-of-network services and will be a factor in the IDR [independent dispute resolution] process, which will, in most cases, determine the payment to providers for out-of-network services," he noted.

Providers and facilities also need a good understanding of the "highly regulated and very specific notice-and-consent process through which a patient can, in limited circumstances, opt out of NSA protection to establish necessary processes," he said.

3. When a state law will apply is still unclear:

There is a discussion in the interim final rule about how the No Surprises Act will interact with state laws. There's also "additional information regarding when a state law will apply to calculate out-of-network payments instead of the NSA," Rochman said.

However, he pointed out that the interim final rule "does not contain enough information to clearly determine when state law will apply."

"That makes it difficult for revenue cycle leaders to develop plans to implement the NSA, particularly given that there are a wide variety of state laws that already provide balance billing protection. It appears that in every state, providers will be required to apply both federal and state law, but which law will apply to which charges is not yet clear," Rochman said.

4. Arbitration details are sparse, but rev cycle leaders can prepare:

Regulations about the independent dispute resolution (IDR) process aren't due until December 27, even though compliance is required just a few days later, Rochman noted.

Continue Reading:  Arbitration It Is. But How to Decide Who Wins in Surprising Billing Disputes?

"The IDR process is going to be extremely important," he said. That's because the interim final rule indicates that "payments due to providers—for as much as two-thirds of out-of-network claims covered by the NSA—will be decided through agreement or the IDR process."

Despite the lack of rules for the independent dispute resolution process, Rochman said that revenue cycle leaders can prepare by making sure they understand the QPA and the IDR information that is available.

"The detailed information regarding calculation of the QPA will help revenue cycle leaders prepare for the IDR process because the QPA, which is generally the median in-network contract rate for the item or service, will be one factor considered by the arbitrators in determining the amount that should be paid to providers for out-of-network services covered by the NSA," he said.

Fully understanding how the QPA is calculated will help revenue cycle leaders "evaluate plan calculations and maximize revenue through the IDR process," he continued.

"The No Surprises Act itself contains detailed information regarding the IDR process and the evidence that can be submitted by plans and providers which revenue cycle leaders should be using now to establish compliant and effective processes," Rochman said.

5. Keep an eye on the Federal Register for your chance to comment:

"Requirements Related to Surprise Billing; Part I" are scheduled to be published in the Federal Register on July 13. According to CMS, "written comments must be received by 5 p.m. 60 days after display in the Federal Register to be considered."