The Consolidated Appropriations Act of 2021, enacted at the end of 2020 includes the No Surprises Act (“Act”), amending the Employee Retirement Income Security Act of 1974, the Internal Revenue Code of 1986, and the Public Health Services Act. The Act generally takes effect on January 1, 2022 and imposes requirements on group health plans, health insurance issuers offering group or individual coverage and providers of health care services. For these purposes, a group health plan is any plan that provides medical care, other than a plan that provides excepted benefits (such as dental or vision coverage). Self-funded and grandfathered group health plans of any size are subject to these requirements. The Act is intended to protect individuals enrolled in group or individual health care coverage from surprise medical bills, and includes new transparency rules for group health plans, health insurance issuers and providers^[1]. 

It is anticipated that insurance carriers (for fully-insured arrangements) and third-party administrators (for self-insured plans) will be tasked with compliance with these new requirements. Plan sponsors and administrators should confirm their group health plan vendors will comply with the Act and anticipate changes to policies and contracts as well as possible increases to premiums or administrative fees related to the vendor’s cost of compliance. 

The surprise medical billing provisions of the Act regulate surprise medical billing and balance billing that could arise from:

• An enrollee’s treatment in any emergency room (in-network or out-of-network),
• An enrollee’s treatment without advance disclosure and consent to provision of a non-emergency service by an out-of-network provider at a participating (in-network) health care facility, or
• transportation of an enrollee by an out-of-network air-ambulance service.  

The Act also contains provisions for plans, insurers and out-of-network providers to negotiate the amount to be paid for the service as well as independent dispute resolution (IDR) procedures similar to the IDR procedures required for participant claims for benefits under the Affordable Care Act. Under the Act, group health plans and health insurance issuers are required to:

• Offer price comparison tools that allow an enrolled individual to compare costs of a service among participating providers.
• Include any deductibles, out-of-pocket maximums and a contact number for consumer assistance on insurance identification cards.
• Provide advance explanation of benefits to an enrolled individual for scheduled procedures or services as to whether the provider is a participating provider under the plan or coverage, information on participating providers, and good faith estimates for the service. 
• Establish a verification process, response protocol and a database to ensure the provider directory is kept up to date.
• Post on a public website and include in the EOB a statement regarding prohibition on balance billing under certain circumstances.
• Eliminate so-called “gag clauses” from contracts that prevent provider-specific cost data and quality of care information from being available to providers, plan sponsors, participants and beneficiaries; and certify such compliance at least once a year. 
• Perform and document a comparative analysis of the design and application of nonquantitative treatment limitations for any mental health and substance abuse disorder coverage if the plan or issuer imposes nonquantitative treatment limitations. Upon request, this information must be submitted to state and federal regulators, who can request the information as early as 45 days after the Act became law.
• Adopt the continuity of care process imposed by the Act in cases where the provider and plan/insurer relationship terminates.

Under the Act, providers of health care services are generally required to:

• Post a notice of patient rights under the Act, including the prohibition on balance billing.
• In the case of an air ambulance service provider, submit data to the Department of Health and Human Services.
• Submit a good faith estimate of the cost of the services to the group health plan or insurance issuer in advance of the service if the provider is out-of-network.
• Update the group health plan or health insurance issuer on changes to their information.
• Provide in advance a good faith estimate to the enrollee for the cost and diagnostic billing code of the services, and in-network or out-of-network status.
• For individuals who did not consent to the out-of-network service, hold individuals liable for no more than the cost sharing amount for such service under the group health or individual coverage.

While individuals may only pay their share of in-network costs for most services, the group health plan or insurance issuer might be required to absorb the remaining balance due to the provider. Under the Act’s IDR procedures, the parties are first encouraged to engage in good faith negotiations. If the negotiations fail, an independent reviewer will be appointed to resolve the dispute. Each party will be required to present an offer to the reviewer. The reviewer will weigh a number of factors when determining which offer to accept, including the in-network median rates for the service. If the dispute is settled before the reviewer’s final decision, the parties will be required to split the cost of the independent review. Otherwise, the party whose offer is not accepted by the reviewer, will bear the cost of the independent review.  

States have enforcement authority for health insurance issuers and insured group health plans. The Department of Labor has the enforcement authority for self-funded plans. 

The Act requires the Department of Health and Human Services, the Department of Labor and the Department of Treasury to issue regulations to implement the various aspects of the law, with the first set of regulations to be issued by July 1, 2021. 

1. These requirements are in addition to the requirements imposed by the Transparency in Coverage final rules released by the Department of Health and Human Services, the Department of Labor and the Department of Treasury. Under that rule, non-grandfathered group health plans and health insurance issuers will be required to provide enrollees with cost-sharing information and the negotiated rates for health care services and items. They will also be required to provide detailed pricing information to the public in three readable-machine files.