Federal No Surprises Act (NSA): What to Look Forward to in 2023? PART I
By Ed Marasco, MPM, CMTE, EMT-P (ret.) *
The No Surprises Act (NSA) was passed late in 2020 and the regulatory process unfolded in a frenzy throughout 2021. There has been quite a bit of additional guidance issued in 2022; however, some questions still remain.
FEDERAL INDEPENDENT DISPUTE RESOLUTION PROCESS – FEE TYPES
On October 7, 2021, the Departments issued interim final rules titled Requirements Related to Surprise Billing; Part II (interim final rules) to implement the Federal IDR process. The interim final rules established the parameters governing the administrative and certified IDR entity fees that certified IDR entities are to collect from the parties:
- Administrative Fee
Under the interim final rules, each party must pay an administrative fee for participating in the Federal IDR process. The administrative fee is paid by each party to the certified IDR entity and remitted to the Departments. The administrative fee is established annually to cover the expenditures estimated to be made by the Departments to carry out the Federal IDR process for that year.
- IDR Entity Fee
Under the interim final rules, each party must also pay a certified IDR entity fee. However, the non-prevailing party is ultimately responsible for the full certified IDR entity fee, which is retained by the certified IDR entity. The certified IDR entity fee that was paid by the prevailing party will be returned to the prevailing party within 30 business days following the date of the payment determination.
If the parties reach an agreement after initiating the Federal IDR process but before the certified IDR entity makes a payment determination, the certified IDR entity fee will be split evenly between the parties. In the case of batched determinations, the certified IDR entity may make different payment determinations for each qualified IDR item or service under dispute. In these cases, the party with the fewest determinations in its favor is considered the non-prevailing party and is responsible for the full certified IDR entity fee. If each party prevails in an equal number of determinations, the certified IDR entity fee will be split evenly between the parties.
The IDR entity must submit to the Departments the amount of the IDR entity fees it intends to charge for payment determinations. Each of these IDR entity fees must be within a range set forth in guidance by the Departments, unless the certified IDR entity receives written approval to charge a certified IDR entity fee outside that range. On an annual basis, the certified IDR entity may update its certified IDR entity fees within the range set forth in current guidance and seek approval from the Departments.
FEDERAL INDEPENDENT DISPUTE RESOLUTION PROCESS – FEE GUIDANCE HISTORY
On September 30, 2021, the Departments issued “Calendar Year 2022 Fee Guidance for the Federal Independent Dispute Resolution Process under the No Surprises Act,” which provided fee guidance for the calendar year 2022. The Departments established an administrative fee of $50 due from each party participating in the Federal IDR process. The 2022 guidance also established the range for IDR entity fees for single determinations as $200–$500 and the range for fixed certified IDR entity fees for batched determinations as $268–$670.
FEDERAL INDEPENDENT DISPUTE RESOLUTION PROCESS – 2023 FEE GUIDANCE
The new guidance sets forth the administrative fee for participating in the Federal IDR process for the calendar year 2023. This guidance also sets forth the allowable ranges for IDR entity fees for the calendar year 2023.
In setting the administrative fee for 2023, the Departments considered the costs for the Departments to administer the Federal IDR process during 2022, including the staffing and contracting costs related to certification and oversight of certified IDR entities; the costs of developing and publishing reports as required under Code sections 9816 and 9817, ERISA sections 716 and 717, and PHS Act sections 2799A–1 and 2799A–2; the costs of collecting the administrative fees from certified IDR entities; and the costs of maintaining the Federal IDR portal. Because of program experience to date, and as a result of the changes to the Federal IDR process and the Federal IDR portal to address court rulings, the Departments are of the view that current data regarding the Federal IDR process is not reliable enough to support a change to either the estimated number of payment determinations for which administrative fees would be paid or the estimated ongoing program costs for 2023. Therefore, the 2023 administrative fee amount due from each party for participating in the Federal IDR process will remain $50 for the calendar year beginning January 1, 2023.
The Departments are supposed to consider certain factors in setting the permitted certified IDR entity fee range, including the anticipated time and resources needed for certified IDR entities to meet the requirements of the rules, such as the time and resources needed to make payment determinations, data reporting, and audits. The Departments will also consider the anticipated volume of Federal IDR initiations and payment determinations and the adequacy of the Federal IDR process capacity to efficiently handle the volume of Federal IDR initiations and payment determinations. The Departments found that the number and complexity of the disputes were more than twice that which was anticipated.
Accordingly beginning January 1, 2023, certified IDR entities are permitted to charge an IDR entity fee for single determinations within the range of $200–$700. The Departments are of the view that this range will keep costs reasonable, thereby reducing the potential for excessive IDR entity fees that could result in inflated healthcare and insurance costs that could ultimately be passed on to consumers. For the calendar year 2023, if a certified IDR entity chooses to charge a different fixed certified IDR entity fee for batched determinations, that fee must be within a range of $268–$938.
In addition, without the need to seek further approval, to account for the differential in the workload of batched determinations, a certified IDR entity may charge the following percentage of its approved certified IDR entity batched determination fee (“batching percentage”) for batched determinations, based on the number of line items initially submitted in the batch:
- 2-20 line items: 100% of the approved batched determination fee
- 21-50 line items: 110% of the approved batched determination fee
- 51–80 line items: 120% of the approved batched determination fee
- 81 line items or more: 130% of the approved batched determination fee
The Departments are of the view that this approach to charging for batched determinations will ensure that a certified IDR entity is compensated based on the level of effort, costs are reasonable, the Federal IDR process is accessible, and IDR costs are clear to parties in advance of initiating the Federal IDR process in 2023.
IDREs must make applications to the Departments for a 2023 rate increase by November 18, 2022. As long as the rates are within these guidelines they will be approved and will become effective for January 1, 2023.
The NSA remains a challenge to air medical services providers from a compliance, process, operational and financial perspective. Stay tuned right here for more information and updates as the process evolves.
*Ed Marasco is QMC’s Vice-President of Business Development and a veteran healthcare provider and administrator with over 40 years of experience in emergency medical services, reimbursement, and consulting.
