This insight describes the provisions affected by the guidance and the measures plan sponsors must take to ensure implementation of the No Surprises Act requirements using a good-faith, reasonable interpretation of the law.

To the extent that states are the primary enforcers of a requirement that applies to insurers, HHS encourages them to take a similar enforcement approach and will not determine that a state is failing to substantially enforce the requirement.

Background

Most group health plans and health insurers are subject to the No Surprises Act, which amends ERISA, the Public Health Service Act and the Internal Revenue Code effective for plan years beginning on or after January 1, 2022. The No Surprises Act prevents surprise billing of patients who receive emergency services in the emergency department of a hospital, at an independent freestanding emergency department and from air ambulances. In addition, the law protects patients who receive certain non-emergency services from an out-of-network provider at an in-network facility.

Effective for plan years beginning on or after January 1, 2022, these patients will only be responsible for paying in-network cost sharing, regardless of whether emergency services were rendered at a participating or nonparticipating provider or facility. Patients cannot be balance billed by the provider or facility for emergency services. Health plans must send an initial payment or a notice of denial of payment to the provider or facility within 30 calendar days of the non-participating provider sending the bill. If a bill is disputed, it can be referred to Independent Dispute Resolution, on which regulations will be published later this year.

The No Surprises Act is applicable to most group health plans, including grandfathered group health plans. However, certain plans are excluded and do not have to comply, including retiree-only plans, plans consisting solely of excepted benefits (e.g., most dental and vision benefits and health flexible spending arrangements), health reimbursement arrangements or other account-based group health plans and short-term, limited-duration insurance.

The No Surprises Act has an extensive list of requirements for group health plans that we’ve summarized in a timeline. We recorded our July 2021 webinar on the No Surprises Act.

Delayed enforcement

The guidance states enforcement of the following provisions of the No Surprises Act and the transparency rules is delayed until the Departments issue future rules through notice and comment rulemaking:

• Prescription drug negotiated rate machine-readable file
• Prescription drug reporting
• Advanced Explanation of Benefits

Prescription drug negotiated rate machine-readable file

The Departments will defer the enforcement of the transparency rule requirement for non-grandfathered plans to publish a machine-readable file of prescription drug negotiated rates while it considers, through notice and comment rulemaking, whether the requirement is still necessary in light of the No Surprises Act requirement to report certain information regarding plan prescription drug costs.

Prescription drug reporting

Previously, the Departments requested comments about the No Surprises Act requirement to report certain prescription drug cost information to the Departments. (See our June 23, 2021 compliance insight, “Request for Information on Rx Reporting.”)

The provision, originally requiring reporting by December 27, 2021, cannot take effect until the Departments issue rules concerning the scope and manner of reporting.

The Departments state that they expect to issue rulemaking in the future that strongly encourages plans to ensure they can begin reporting the required information with respect to 2020 and 2021 data by December 27, 2022, and then each June 1 thereafter.

Advanced Explanation of Benefits

The No Surprises Act requires health care providers to send an estimate of charges to plans once a participant schedules a medical appointment. Then, the No Surprises Act requires plans to send the participant an advance Explanation of Benefits (EOB) form containing certain information. The Departments recognize that HHS must issue guidance for health care providers to send information to plans in order to trigger the advanced EOB process. In addition, the Departments acknowledge that plans need time to set up the technical infrastructure to accept information from providers.

Consequently, the Departments have deferred enforcement of the advanced EOB requirement until future rulemaking is complete. They also intend to undertake notice and comment rulemaking to implement the process, including establishing appropriate data-transfer standards between plans and providers.

Deferred enforcement

These provisions of the No Surprises Act and transparency rule will continue to have the same effective date, but the Departments will defer enforcement:

• In-network and out-of-network rate machine-readable files
• Price-comparison tool

In these cases, plan sponsors are expected to implement the requirements using a good faith, reasonable interpretation of the law. The requirements for each enforcement deferral differ slightly and are discussed below.

In-network and out-of-network rate machine-readable files

The Departments will defer enforcement of the transparency rule requirement to publish machine-readable files for in-network rates and out-of-network allowed amounts and billed charges until July 1, 2022.

This means that plans with plan years beginning from January 1 to June 30 will have an effective date of July 1, 2022.

For plans with plan years beginning from July 1 to December 31, the effective date will remain unchanged (i.e., the first plan year beginning on or after January 1, 2022).

Price-comparison tool

The No Surprises Act requires plans provide a price-comparison tool to participants through an internet-based, self-service tool, by paper on request and over the telephone. This requirement is similar to the transparency rule requirement for an internet-based self-service tool, but has different criteria and effective dates.

The Departments intend to propose rulemaking and seek public comment concerning whether the transparency rule internet-based, self-service tool requirement satisfies the No Surprises Act price-comparison-tool requirement. In addition, they will propose regulations concerning how to provide this information over the telephone.

Because the transparency rule required the internet-based, self-service tool to be made available for plan years beginning on or after January 1, 2023 (with respect to 500 services) and January 1, 2024 (for the remaining items and services), the Departments will align the time frames for both requirements. Consequently, the No Surprises Act price-comparison-tool requirement is deferred until plan years beginning on or after January 1, 2023.

Provisions for which regulations will not be issued before the effective date

The Departments do not intend to issue regulations implementing these No Surprises Act requirements prior to the effective date:

• ID cards
• No gag-clause rule and attestation
• Provider directory
• Balance-billing disclosure to participants
• Continuity of care

However, the Departments stated plan sponsors should implement the provisions using a good-faith, reasonable interpretation of the law.

ID cards

The Departments will issue rulemaking in the future concerning the provision of the No Surprises Act that requires plans to include any applicable deductibles, out-of-pocket maximum limitations and contact information on physical or electronic ID cards. Future rulemaking will address both general rules and complex situations where plans have complex deductibles and out-of-pocket maximums.

Pending future guidance, plan sponsors are expected to implement the ID card requirements using a good-faith, reasonable interpretation of the law. In making a good-faith effort and a reasonable interpretation of the law, plan sponsors must use methods that are reasonably designed and implemented to provide the required information to all participants and dependents.

The Departments will consider the following factors in determining whether the steps taken are reasonable:

• Is each specific data element on the card?
• Are data elements required by the law, but not included on the face of an ID card, made available through information that is provided on the ID card?
• What mode is used to provide any information absent from the card?
• By what date did the plan make required information available on relevant ID cards?

The Departments stated that pending additional rulemaking, plans may include on a physical or electronic ID card the applicable major medical deductible and applicable out-of-pocket maximum, with a telephone number and website address for individuals seeking consumer assistance and access to additional applicable deductibles and maximum out-of-pocket limits. Those additional deductibles and out-of-pocket maximums may also be provided on a website that is accessed through a Quick Response (QR) code on the ID card or through a hyperlink on a digital ID card.

No gag-clause rule and attestation

The No Surprises Act bans contract clauses that prevent disclosure of certain price or quality information. In addition, it requires plan sponsors to attest annually that they are in compliance with this requirement. The Departments state that the ban on gag clauses is effective December 27, 2020, the date of enactment of the Consolidated Appropriations Act.

The Departments state that they will not issue regulations on this provision, because it is self-implementing. Plan sponsors should implement the requirements prohibiting gag clauses using a good faith, reasonable interpretation of the No Surprises Act. With regard to the attestation requirement, the Departments will issue implementation guidance to explain how plans should submit their attestation of compliance and anticipate beginning to collect attestations starting in 2022.

Provider directory

The No Surprises Act requires that plans establish protocols to assure that provider directories are kept up to date and to hold harmless participants who rely on outdated directory information. The Departments will not issue regulations prior to the effective date. Plan sponsors must implement the provider directory requirements using a good faith, reasonable interpretation of the statute.

Pending regulatory guidance, plans must assure that if a participant or dependent is told that a provider or facility is participating and that information is incorrect, the participant is only responsible for a cost-sharing amount that would be imposed if the provider or facility were participating, and that those amounts must count toward any deductible or out-of-pocket maximum.

Balance-billing disclosure to participants

The No Surprises Act requires plan sponsors to make certain disclosures to plan participants concerning their rights not to be balance billed for certain services. The Departments will not issue guidance prior to the effective date concerning these obligations.

However, the Departments previously issued a model notice that must be posted on the plan’s website. Use of the model notice will constitute good-faith compliance with this requirement.

Continuity of care

The No Surprises Act requires plans to allow participants to continue to receive care from providers for up to 90 days after the provider terminates its network contract as a participating provider. The Departments will not issue regulations prior to the effective date. When regulations are issued they will include a prospective applicability date to allow both plans and providers a reasonable amount of time to comply.

Until regulations are issued, plan sponsors are expected to implement the continuity of care requirements using a good-faith, reasonable interpretation of the statute.

Clarification of applicability of requirements to grandfathered plans

The Departments clarify that grandfathered plans are subject to all of the requirements in the No Surprises Act. In addition, grandfathered plans must now comply with certain patient protection provisions of the Affordable Care Act, including those related to the choice of health care professional.

Grandfathered plans are not, however, subject to the transparency rules.

Action items

Plan sponsors should continue to work diligently to implement the patient protections of the No Surprises Act, which require changes to participant cost-sharing for certain emergency services and non-emergency services provided at in-network facilities. These provisions prevent balance billing by health care providers and require plans to resolve disputes with certain providers through Independent Dispute Resolution (IDR). Interim final regulations concerning Part 1 of the No Surprises Act were issued in July. (See our July 14, 2021 compliance insight, “Rule on the No Surprises Act Covers Provider Payments.”) Regulations concerning Part 2 related to IDR are expected soon. These provisions, effective for plan years beginning on or after January 1, 2022, are not delayed or deferred in the latest guidance.

Now that the guidance that clarifies and reconciles the conflicts between the No Surprises Act and transparency rules, plan sponsors can concentrate on the provisions of the law that will be effective for plan years beginning on or after January 1, 2022, particularly those related to payment of emergency services and protection of participants from balance billing. To implement these, plan sponsors must amend plan documents, contracts and payment policies protections. They should also consider developing a compliance plan to document their efforts to comply in good faith with the provisions that have a delayed enforcement and/or pending future rulemaking by the Departments.