Navigating the Complex Landscape of Independent Dispute Resolutions (IDRs), Qualifying Payment Amounts (QPAs), and More
Surprise medical bills can arise after receiving healthcare services, even when the patient has health insurance. Examples where this may occur include out-of-network emergency care, air ambulance services, or upon unexpectedly receiving treatment from an out-of-network provider while at an in-network facility. Generally speaking, situations where members are not able to consent to receiving treatment and could receive an unexpected bill.
In response, the Centers for Medicare and Medicaid Services (CMS) enacted the No Surprises Act (NSA) effective January 1, 2022. This legislation protects patients from surprise medical bills, limits out-of-pocket expenses, and prohibits balance billing by out-of-network providers when patients had no choice.
While the NSA provides much-needed consumer protection, it also adds a new level of complexity to paying healthcare claims. While the NSA doesn’t prescribe how payors should reimburse for surprise bills, it does outline a process to follow for settling any payment disputes. The end goal of the No surprises Act is reaching a fair reimbursement amount.
In this blog post, we’ll answer some of the most commonly asked questions about the No Surprises Act.
QUESTION
What sort of healthcare claims are affected by the No Surprises Act (NSA)?
ANSWER
The No Surprises Act (NSA) covers claims related to emergency services from the point of a patient’s evaluation and treatment until they were stabilized and can consent to being transferred to an in-network facility. It covers air ambulances but not ground ambulances. The NSA also covers claims related to non-emergency services when they are provided at an in-network facility by an out-of-network provider.
QUESTION
What happens if my state also has a surprise bill regulation?
ANSWER
20+ states have their own surprise bill regulations, which supersede the No Surprises Act (NSA) for fully insured plans, and those self-insured plans who have opted in. These rules have the same goal as the NSA–to protect members from unanticipated out of network costs–but may differ in requirements and processes. If a particular state rule is less expansive than the No Surprises Act (NSA), then certain parts of NSA may apply as well. Learn more about state surprise bill regulations here.
QUESTION
How can healthcare payors avoid arbitration under the No Surprises Act (NSA)?
ANSWER
Under the No Surprises Act (NSA), payors and providers move to arbitration when they can’t agree on the payment amount for services rendered. Before bringing a case to arbitration, the parties must try to negotiate a settlement on their own. Either party has up to 30 business days after the payor makes an initial payment or provides notice of denial to begin the negotiation process, and the negotiation must be open for at least 30 business days. If the two sides can’t negotiate a settlement, either party can initiate the Independent Dispute Resolution (IDR) process, which is also known as arbitration.
QUESTION
What is a Qualifying Payment Amount (QPA)?
ANSWER
Qualifying Payment Amount (QPA) is a term introduced by the No Surprises Act (NSA). It’s the plan’s median contracted rate for a specific service in the same geographic region within the same insurance market–that is, the middle amount in an ascending or descending list of contracted rates, adjusted for the market consumer price index in urban areas (CPIU).
In most cases, the member cost share is based on Qualifying Payment Amount (QPA) rather than the allowed amount. In addition, QPA is one of the factors considered by Independent Dispute Resolution (IDR) entities when reviewing surprise bill payment disputes between payors and providers.
QUESTION
What is the Recognized Amount (RA)?
ANSWER
Under the No Surprises Act (NSA), the member’s cost share of claims that qualifies as surprise bills must be based on the Recognized Amount (RA). For most ERISA plans, the RA is the lesser of billed charges or the Qualifying Payment Amount (QPA). For insured claims regulated under state surprise bill laws or all-payor model agreements, or ERISA plans that have opted in to such laws, the RA may be determined by the state law.
QUESTION
Does the No Surprises Act (NSA) apply to plans that don’t use networks/reference-based pricing without a network?
ANSWER
Yes. The Interim Final Rule (IFR) published in July 2021 and updates published with the August 19, 2022 Final Rule made clear that the NSA applies to claims that don’t use a network. In those cases, the requirements are primarily limited to emergency services and air ambulance services.
However, the IFR also stated that any agreements between the reference-based pricing (RBP) vendor and a facility would be considered as an “in network” facility for purposes of identifying surprise bills. The FAQ further clarifies that these plans are expected to use the Qualifying Payment Amount (QPA), as required under the No Surprises Act (NSA)—to determine the member’s cost sharing and as disclosure to the provider with reimbursement. The departments direct these plans to use an eligible database to calculate QPA.
QUESTION
What do machine-readable files (MRFs) have to do with the No Surprises Act (NSA)?
ANSWER
The requirement about machine-readable files is related to the Transparency in Coverage (TiC) mandate, not the No Surprises Act (NSA). This mandate requires health plans to post three types of files publicly in non-proprietary, machine-readable format: (1) in-network negotiated rate files, (2) out-of-network allowed amount files, and (3) in-network negotiated prescription drug files. All of these files must be updated monthly.
QUESTION
If members receive a balance bill for a service covered by the No Surprises Act (NSA), what should they do?
ANSWER
We recommend that the members contact their health plan or visit https://www.cms.gov/nosurprises/consumers for more information.
Health plans want to comply with the No Surprises Act (NSA) without passing on undue cost increases or creating more friction for members. That’s often easier said than done, however. The good news is that Claritev can help achieve these goals. We identify surprise bills, calculate the Qualifying Payment Amount (QPA) and include it on processed claims so plans can complete the adjudication, reprice claims at the QPA or just below or above it, and own the Independent Dispute Resolution (IDR) process from end-to-end if settlement isn’t reached.
