The Federal No Surprises Act (NSA) and individual state surprise bill laws share the same goal of protecting consumers from unexpected medical bills. The path each regulation takes to achieve that goal can vary significantly however – from how surprise bills are defined and paid, to how disputes between payors and providers are handled.

Difference 1 – Terminology & Definitions

Federal and state surprise bill laws differ with respect to terminology and definitions. For example:

• No Surprises Act (NSA) – This term only applies to the Federal law and should not be used in reference to state surprise bill laws, as the individual states will use their own nomenclature.
• Emergency Services – The NSA uses a broad definition compared to the narrower definitions often found in state surprise bill laws. For example, NSA encompasses services provided before and after a patient’s emergency condition is stabilized while state surprise bill laws may exclude post-emergency stabilization.

Difference 2 – The Concept of QPA

The Qualified Payment Amount (QPA) only applies to the Federal law and is defined as a plan’s median contracted rate for the same or similar services when provided by the same or similar providers in the same geographic market, adjusted for inflation. QPA requires a specific methodology to calculate the median contract rate and is only applicable to the Federal NSA. It is used to calculate member cost-share, as a factor in the IDR process, and must be disclosed to the provider.

Some state surprise billing laws may use the median contract rates, as part of their payment standards or dispute resolution processes, but the required methodology to calculate the value may vary from the QPA methodology. While state surprise bill laws may also reference median contract rate with respect to payment requirements or arbitration evaluations, the methodology may vary – so the two cannot be used interchangeably.

To learn more about the QPA, read our blog post “QPA 101 – Practical Information About Qualifying Payment Amounts and the No Surprises Act.”

Difference 3 – Coverage

Services and plan types covered by NSA may vary from those covered by specific state surprise bill laws. For health plans, the NSA generally applies to members covered under group health plans and group and individual health insurance coverage regardless of whether those plans are fully or self-insured. State surprise bill laws offer protections to consumers enrolled in fully insured plans, with some states allowing self-funded plans to opt in to the state’s surprise bill law. Given the nuance and complexity of when a plan is required to comply with Federal or state law, it is vital to have a strong understanding of where the NSA applies versus where state surprise bill laws apply.

The NSA covers services under these three specific scenarios:

• Out-of-network emergency services (including post-stabilization services)
• Nonemergency items and services furnished by out-of-network providers with respect to a patient visit to certain types of participating health care facilities
• Air ambulance services furnished by out-of-network providers of air ambulance services.  

The state surprise bill laws will vary widely by state, so some state surprise bill laws may have stronger member protection than NSA, and some areas where protection is not as comprehensive as NSA. In those instances where the state law is not as comprehensive as the Federal NSA, the Federal NSA will apply to fill in those gaps.

Difference 4 – Reimbursements

NSA and state surprise bill laws typically handle provider reimbursement differently. The NSA does not dictate what the provider reimbursement must be, so health plans can use their preferred methodology to determine the appropriate amount for the services. Some state laws, on the other hand, require surprise bills to be paid a specific way. Those pricing standards can include reimbursement methodologies like market medians, usual and customary amount and Medicare pricing, and often include “greatest of” or “lesser of” language.  

Reimbursement disputes between providers and payors are also handled differently depending on whether the claim was covered by the federal or state requirements. If the plan and provider cannot agree on a reimbursement rate under the NSA, they must seek to resolve their dispute during a period of open negotiation, followed by an Independent Dispute Resolution process. State surprise laws differ and may include negotiation obligations, arbitration or mediation processes, or combinations of these options.

Difference 5 – Member Cost Share

The approach to determining the member cost share will be determined by whether the claim is covered by the NSA or a state surprise bill law. When covered by the NSA, the member cost share is generally the recognized amount – which is calculated using the QPA. When covered by a state surprise bill law, member responsibility may be calculated differently, depending on the state payment standard.

For example, in New Jersey, cost sharing simply must be based on the in-network rate. In comparison, Virginia member cost sharing must be calculated at the in-network cost share rate based on the payor’s median network rate for same or similar services in a geographic area.

Because of the difference between the Federal NSA and state surprise bill laws, compliance requires expertise to understand the nuances of each, and how they can often play together in the same space. With 21 states currently managing their own surprise bill laws, having a partner who can manage the administrative burden and provide the level of support that matches your business needs is key. Claritev is here to support you, with our expert team who can administer the entire NSA or State Surprise Bill process from start to finish.

Learn more about how Claritev can support your NSA compliance needs.

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes. If you have questions about how the No Surprises Act applies to your organization, please consult your legal counsel.