Employers should ensure their service providers and insurers are correctly processing claims to mitigate litigation risks

Employers should be aware that the No Surprises Act has an impact on the maximum-out-of-pocket ("MOOP") limit for annual cost-sharing under the Affordable Care Act ("ACA") and facility fee transparency. The new set of Frequently Asked Questions ("FAQs") from the Departments of Labor, Health and Human Services, and the Treasury (the "Departments") released on July 7, 2023, sheds light on how these laws interact.

Ensuring that insurers and third-party administrators process these claims correctly is even more important given that plaintiff-side law firms have reportedly been advertising online to solicit health plan participants as potential plaintiffs for emerging health plan excessive fee cases.

No Surprises Act and MOOP Limit

To review, the No Surprises Act was implemented under the Consolidated Appropriations Act, 2021. It created protections against balance billing for emergency services (for nonparticipating providers and nonparticipating emergency facilities), as well as non-emergency services from nonparticipating providers at participating health care facilities. It also limited balance billing by air ambulance services from nonparticipating providers of air ambulance services. Participating providers, facilities, and providers of air ambulance services are those that have a direct or indirect contractual relationship with the group health plan or its insurance issuer; nonparticipating providers, facilities, or providers of air ambulance services do not have such contracts. The No Surprises Act amended certain sections of the Code, ERISA, and the Public Health Service Act ("PHS").

The PHS, as amended by the ACA, provides in part that non-grandfathered group health plans (including non-grandfathered self-insured plans) cannot impose annual cost-sharing that exceeds the MOOP limit. For the 2023 Plan Year, the MOOP limit is $9,100 for self-only coverage and $18,200 for family coverage. The MOOP limit, however, does not include costs for premiums, balance billing amounts for non-network providers, or expenses for non-covered services. The Departments have previously clarified that plans may but are not required to count a person's out-of-pocket expenses for out-of-network expenses toward the MOOP limit. The FAQs are intended to provide further clarification and to promote compliance.

FAQ 1 clarifies that services by participating providers, facilities, and providers of air ambulance services are considered to be in-network for cost-sharing purposes under the MOOP limit. Conversely, services from nonparticipating providers, facilities, and providers of air ambulance services are considered to be out-of-network for cost sharing for purposes of the MOOP limit. As stated above, a plan may count out-of-pocket out-of-network expenses toward the MOOP limit, but it is not required to do so.

FAQ 2 addresses the incongruency that arises when plans or issuers have contractual relationships with providers, facilities, or providers of air ambulance services, but those plans or issuers do not consider them to be part of their network or "participating" for purposes of the No Surprises Act. In such cases, the FAQ explains that where a plan or issuer has a direct or indirect contractual relationship with a provider, facility, or provider of air ambulance services, then that provider, facility, or provider of air ambulance services must be considered "participating" for purposes of the No Surprises Act. Therefore, the costs of such services and fees count toward the MOOP limit.

Transparency in Coverage for Facility Fees

FAQ 3 explains that a good faith estimate of facility fees (often charged at clinics to cover costs of maintaining that facility) must be included in the plan or issuer's internet-based self-service cost comparison tool for items and services. Under the No Surprises Act's facility fee disclosure rule, providers and facilities must provide a good faith estimate of the expected charges for furnishing scheduled items or services, as well as those items and services reasonably expected to be provided in conjunction with those items and services. The Departments reason that facility fees fit under the definition of "items and services" in the ACA's transparency in coverage rules and are therefore required to be included in the online comparison tool (or in paper form, if requested).

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