On September 10, 2021, the U.S. Departments of Labor, Treasury, Health and Human Services, and the Office of Personnel Management (the “Departments”) released a Notice of Proposed Rulemaking (“NPRM”) entitled Requirements Related to Air Ambulance Services, Agent and Broker Disclosures, and Provider Enforcement. The rule is set to be published in the Federal Register on September 16, 2021 with comments due within 30 days from publication.
Although the NPRM provides some specific requirements for implementation of the No Surprises Act by providers, health plans, and issuers, the Departments acknowledge that future rulemaking may not occur until after the January 1, 2022 implementation date of the Act. Thus, in some instances, health plans will have to use good faith, reasonable efforts to interpret the statute. What we know from the NPRM is as follows:
The NPRM addresses federal enforcement authority provided under the No Surprises Act (the “NSA”) when a state chooses not to be the primary enforcer of, or fails to substantially enforce, the applicable Public Health Service Act (“PHS Act”) provisions related to group and individual insurance market and provider and facility requirements. States have enforcement authority over health insurance issuers relating to the PHS Act, unless the state gives notice to CMS or fails to substantially enforce the applicable provisions. The preamble notes that “HHS is of the view that states would not look to enforce these PHS Act provisions because they are requirements for issuers to report to HHS or the other Departments, and states would not have access to the submissions to assess compliance.”
HHS proposes to codify civil monetary penalties not to exceed $10,000 per violation if a provider or facility violates a PHS Act requirement and for a provider of air ambulance services that fails to submit required data.
Agent and Broker Compensation Reporting
The NPRM also attempts to codify at 45 CFR 148.410 the requirement contained in the Consolidated Appropriations Act, 2021 for health insurance issuers offering individual or short-term, limited-duration insurance (“STLDI”) to disclose to a potential or existing policyholder and report to HHS any direct or indirect compensation given to an agent or broker for enrolling individuals in coverage. The NPRM proposes to define direct and indirect compensation as:
Direct Compensation – monetary amounts, including sales and base commissions, paid by an issuer that are attributable directly to the policy, certificate, or contract of insurance and that are paid to an agent or broker for the sale, placement, or renewal of individual health insurance coverage or STLDI.
Indirect Compensation – payments by an issuer attributable indirectly to a policy, certificate, or contract of insurance to agents, brokers, and other persons for items other than sales and base commission.
The disclosure would include the commission schedule and the structure for any compensation not included in the commission schedule and, for new initial enrollments, would need to be made prior to the potential policyholder finalizing their plan selection. The disclosure would need to be included on any documentation that confirms the initial enrollment and with a renewal notice and must comply with Federal language and accessibility requirements. Issuers are not required to provide the disclosure on other documents confirming enrollment. The issuer’s obligation may be satisfied by an agent or broker making the disclosure on behalf of the issuer.
The NPRM proposes that the annual report from issuers would be due by the last business day of July of the calendar year following the applicable reporting period. The preamble states that “[d]isclosure of direct and indirect compensation is intended to inform the consumer of considerations, other than those in the consumer’s best interests, which may impact the guidance and decision-making of the insurance agent or broker.”
Air Ambulance Information Reporting under NSA
The NSA, contained in the Consolidated Appropriations Act, 2021 (“CAA”), requires providers of air ambulance services to report certain information to the Secretaries of HHS and the Department of Transportation for two years and provides for civil monetary penalties for providers that fail to submit the required data. The NSA also requires issuers of group or individual health insurance coverage to report similar data to all of the Departments. The NPRM proposes that the group and individual issuer requirements would be satisfied through reporting to HHS.
The NPRM cites to a Government Accountability Office study using 2017 data that found that “69 percent of air ambulance transports of privately-insured patients were out-of-network” and the median price was $36,400 for rotary-wing transport and $40,600 for a fixed-wing transport. States attempting to regulate air ambulance providers have been stymied by a preemption provision in the Airline Deregulation Act of 1978.
The Departments propose a calendar year reporting period with data submission required for calendar year 2022 by March 31, 2023 and data related to calendar year 2023 by March 30, 2024. Plans and issuers that do not have claims or make payments for air ambulance services during the reporting period will not need to submit information.
The NPRM proposes reporting requirements for plans and issuers at 45 C.F.R. §149.230 and providers of air ambulance services at 45 C.F.R. §149.260. These requirements would not apply to STLDI, excepted benefits, and Individual Health Coverage Reimbursement Arrangements, but would apply to grandfathered plans.
Providers of air ambulance services would be required to submit under proposed 45 C.F.R. §149.260(b) detailed data relating to corporate information; air ambulance base information; cost information; revenue information; and transport information.
This is the second rulemaking related to implementation of the NSA. The NPRM states that “[l]ater this year, the Departments intend to issue regulations regarding the Federal independent dispute resolution (IDR) process (sections 103 and 105 of the No Surprises Act) and patient protections through transparency and the patient-provider dispute resolution process (section 112 of the No Surprises Act).”
The Departments also provide that provisions of the CAA relating to transparency in plan and insurance identification cards, continuity of care, accuracy of provider network directories, prohibition on gag clauses and pharmacy benefit and drug cost reporting, which become effective on December 27, 2021 or January 1, 2022, may not be issued until after January 1, 2022 and that “any such rulemaking to fully implement these provisions would include a prospective applicability date.” Health plans and issuers are “expected to implement the requirements using a good faith, reasonable interpretation of the statute.”