Do Patient Health Insurance Plans Matter under the No Surprises Act?

Since the adoption of the verification and authorization process for medical services, out-of-network medical providers have gone through the age-old procedure of contacting insurance companies to verify a patient’s benefits, cost sharing amounts and fee schedules (when available and responded to by payors) and to obtain authorization for providing the services. The provider would then perform the surgery, submit the HICFA form with the billed charges and await the Explanation of Benefits (EOB) from the payor. When the EOB reflected low reimbursement, the provider would begin the onerous, lengthy appeal process to seek additional reimbursement. Often, EOBs would indicate reimbursement was made at “Medicare” or some other low rate secretively set by a third-party repricing company – allegedly pursuant to the patient’s benefit plan or insurance contract.  Overcoming these obstacles to obtain additional reimbursement would be challenging and, due to limitations imposed by ERISA and plan documents, providers had limited options through the legal process.

The No Surprises Act (NSA) has now changed this landscape, giving out-of-network providers direct rights to reimbursement in a reduced time period. While the NSA has many aspects that may be unfavorable to the out-of-network provider, one benefit is that patient insurance plans do not matter when the claim is subject to the NSA. Generally, emergency services and services provided by an out-of-network provider at an in-network facility where the patient has not signed a valid notice and consent are subject to the NSA. Use of the notice and consent remains available for the patient to sign before the services, but it might lead to a plan with low reimbursement and instances where the patient has agreed to be financially responsible for any liability over the “allowed amount” or “recognized charge.” Most payors are continuing the trend to reduce reimbursement for out-of-network plan fee schedules.

Since the ultimate amount paid as the out-of-network rate under the NSA is set by an Independent Dispute Resolution (IDR) entity based on a baseball style arbitration, the fee schedule contained in the member’s plan is irrelevant and payors are no longer in sole control of the process. Thus, for those claims subject to the NSA, the days of being told by payors that the plan pays at “110% of Medicare” or “the rate was set by Data iSight” are over. Instead, if handled correctly through the time sensitive multi-step IDR process, the out-of-network provider can achieve greater reimbursements through the IDR process than under a patient’s plan, in some cases in a far shorter timeframe. Much of this will be dependent on the many factors considered by the IDR entity and the qualifying payment amount (QPA), defined as the median in-network contracted rate, submitted by the payor. And, when successful, follow up to receive the award set by the IDR entity and reimbursement of IDR initiation fees is required.

Verification may still play a role for those providers willing to use the courts. When, during the verification process, payors continue to represent fee schedules or GAP exceptions to providers that providers rely upon in moving forward with the surgery, providers may have rights outside of the NSA under State laws.  Since the NSA has only been in effect for a little over a year, this will need to be tested in the future to determine what rights a provider may have that are independent of the NSA under these circumstances.

CH Revenue Management Solutions continues to analyze and develop strategic, unparalleled approaches to maximize out-of-network providers’ reimbursements. By offering a single source solution that includes preservice, billing, appeals and Federal/State IDR services along with prelitigation demands and litigation through our affiliate law firm, Cohen Howard, you can be assured that highly skilled experts with extensive knowledge of the insurance industry and in particular reimbursements, will be handling your practices’ revenue cycle management at any stage of the process you need.

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© 2023 CH Revenue Management Solutions, LLP

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