Agency FAQs Reveal Employers Continue to Struggle with No Surprises Act & Transparency in Coverage Implementation

Seyfarth Synopsis: With staggered effective dates continuing over the course of the next several years, the No Surprises Act (NSA) and Transparency in Coverage requirements impose a number of additional compliance obligations on group health plan sponsors. The DOL, HHS and the Treasury recently issued joint guidance in the form of Frequently Asked Questions (FAQs) attempting to clarify a number of these obligations. The FAQs may be found here.

Guidelines for Transparency in Coverage Machine-Readable Files Notice

As described in earlier legal updates (found here, and here), the agency Transparency in Coverage guidelines contain a host of new requirements, including the requirement that plans make machine-readable files publicly available on the plan’s website no later than 7/1/2022. The agencies had previously indicated that if an employer-sponsored plan maintained no such website, the employer would be required to post the files (or a link to the files) on their public-facing website. Needless to say, this caused great consternation among large employers that carefully curate their public-facing website, so the new FAQs elaborate on and relax this requirement.

Under the new guidance, an employer can satisfy the posting requirement through a link posted on the plan’s third-party administrator (TPA) or insurance carrier’s public website alone. To rely on a TPA/carrier posting, the plan/employer must enter into a written agreement with the TPA/carrier under which the vendor assumes this obligation. (But the guidance reiterates that if the vendor fails to properly post the machine-readable files on its website, the plan will remain liable for violating the disclosure requirements.)
Employers who posted a link to the machine-readable files on their own public website may choose to remove it once they have a written agreement in place.

Guidelines for Disclosure of NSA Notice

The NSA requires entities governed by the NSA (including health plans, insurance carriers and providers) to notify affected individuals of their rights with respect to balance billing. The DOL offered a model notice to satisfy this requirement. Because the regulations were broadly applicable to a diverse array of entities, there was some uncertainty surrounding how they applied in the context of group health plans. The FAQs attempted to clarify this uncertainty as follows:

The FAQs specify the three ways in which plans and issuers must satisfy the notice obligation:
- Make the notice publicly available. It remains unclear what this means in the context of an employer-sponsored group health plan. Presumably the website posting referenced below should satisfy this obligation, but further guidance would be welcome.
- Post the notice on the public website of the plan. Here, the agencies clarify that a plan with no public website (i.e., most employer-sponsored health plans) can satisfy this obligation by entering into a written agreement with the plan’s insurance carrier or TPA under which the TPA/carrier posts the information on a public website where information is normally made available to participants. The FAQs reiterate that the plan ultimately remains liable for any failure on the part of its TPA/carrier.
- Include information regarding protections against balance billing on any Explanation of Benefits (EOB) subject to the new requirements.
As noted above, the DOL has provided a model notice and has updated its model since initial issuance. The FAQs would permit plans to use either version for plan years beginning before January 1, 2023, but thereafter plans must use the revised notice.
The FAQs also clarified that for plans not subject to state balance billing obligations (which would include most self-funded plans), any information in the notice applicable to state guidelines can be removed.

Confirms Applicability to Plans with No Network and Plans Only Offering In-Network Coverage

Because the NSA generally affords protections with respect to non-network services, there was some uncertainty surrounding whether and to what extent those protections would apply for plans with no network (e.g., reference-based pricing plans) or plans that only extend in-network coverage. The FAQs included several clarifications on these points.

Because the NSA requires that certain non-network claims be processed as if they were performed in-network, there had been some uncertainty regarding whether and to what extent these rules apply to (a) plans with no network, or (b) plans with no non-network coverage. The FAQs confirm that the provisions do apply to these types of plans, at least with respect to emergency services and air ambulance services.
In contrast, the provisions that prohibit balance billing and/or limit cost sharing for non-emergency services apply only to services provided by a nonparticipating provider with respect to a visit to a participating health care facility. Therefore, the prohibitions on balance billing and/or provisions that limit cost sharing for non-emergency services provided by nonparticipating providers with respect to a visit to certain participating facilities would never be triggered if a plan does not have a network of participating facilities.
If a plan has no network, the payment amount should be calculated using the NSA’s existing hierarchy (All-Payer Model Agreement, state law, or qualifying payment amount (QPA) using an eligible database).
The FAQs reiterate earlier guidance that requires plans with no network to impose reasonable guardrails to ensure that the plan does not subvert the Affordable Care Act’s limits on out-of-pocket maximums.
The FAQs clarify that if a plan limits network coverage to emergency air ambulance services, then it must only provide non-network coverage for emergency (not non-emergency) air ambulance services.
The FAQs also clarify that the air ambulance provisions apply to pick-ups outside of the U.S. and provide guidance on how to determine the QPA in that context.

Confirms Applicability to Behavioral Health Crisis Facility

The FAQs confirm that the NSA protections can apply in the context of a behavioral health crisis facility if the services otherwise meet the definition of “emergency services” and are provided in connection with a visit to a facility that meets the definition of an “emergency department of a hospital” or “independent freestanding emergency department”.

Clarifications Regarding Calculation of Qualifying Payment Amount

While the NSA attempted to establish a framework for plans to calculate the QPA in most instances (with a fallback allowing plans to rely on an eligible database if data was unavailable), there remain some circumstances where such calculation is not adequately addressed. The FAQs provide certain clarifications for these situations, including the following.

Plans must calculate a median rate based on each provider specialty if the plan’s payment rates vary based on specialty.
If plans offer multiple benefit options across different TPAs, the FAQs clarify that the plan must only determine the QPA for an NSA-protected service based on the rate for the TPA administering the benefit option in which the participant has enrolled (i.e., no coordination across TPAs is required).
The FAQs reiterate that the EOB relating to an NSA claim must include all required information under the NSA rather than directing the participant or provider to a website where that information is available.