The No Surprises Act Proposed Rule on Air Ambulances and Enforcement: Implications for States
JoAnn Volk and Sabrina Corlette, Georgetown University Center on Health Insurance Reforms
On September 10, the U.S. Departments of Health and Human Services (HHS), Treasury, and Labor (DOL) and the Office of Personnel Management (OPM) released a second rule implementing the No Surprises Act (NSA), the comprehensive federal law banning balance bills in emergency and certain non-emergency settings beginning January 1, 2022. (The first rule is summarized in this expert perspective.) This Notice of Proposed Rulemaking (NPRM) details the data on air ambulance services that must be reported to HHS and the Department of Transportation (DOT) and discusses the departments’ proposed approach to enforcement of the NSA. Beyond the NSA provisions, the NPRM also provides guidance on new federal requirements that individual market and short-term plan insurers disclose broker compensation to current and potential enrollees as well as to HHS. Comments on the NPRM are due October 18, 2021.
A detailed summary of the NPRM can be found here. This expert perspective summarizes the provisions of the NPRM and notes particular implications for state regulators and marketplace officials.
Reporting on Air Ambulance Services and Costs
The NPRM details the data that air ambulance providers, group health plans, insurers and Federal Employee Health Benefit (FEHB) plans must submit to HHS and the DOT for services provided and claims paid or received for each of two years (2022 and 2023). The breadth of data elements required of all entities is intended to give regulators a broad look at industry practices and expenses and to compare data across stakeholders. It will also inform a report that HHS, in consultation with DOT, must prepare and make public.
All entities – air ambulance providers and health plans and insurers – would be required to submit a significant amount of information, including data defined as “transport information.” This includes billing codes, flight duration, payers, and payment information. Air ambulance providers would also have to submit “air ambulance base information,” including information for each base owned, leased or operated by the provider. Data here includes aircraft characteristics, contractual arrangements with insurers, and information about costs and revenues.
HHS proposes to directly enforce the data reporting requirements that apply to air ambulance providers, rather than rely on states. For other provisions of the NSA, the statute contemplates that states will be the primary locus of enforcement (discussed further below).
Enforcement of the NSA
In this NPRM, the departments propose to take the same approach to NSA enforcement as has been used to enforce other major amendments to the Public Health Service act, including the Health Insurance Portability and Accountability Act (HIPAA) and the Affordable Care Act (ACA). That is, states are the primary enforcers of provisions that apply to insurers. HHS enforces the insurer provisions when a state fails to substantially enforce the provisions. As with enforcement of other PHSA amendments, CMS will follow a prescribed process for determining whether a state is failing to substantially enforce federal law if CMS determines there is a reasonable question about a state’s enforcement of an NSA provision.
States that lack authority or ability to enforce the insurer provisions can enter into a collaborative enforcement agreement with HHS. Under these agreements, a state would perform the same regulatory functions it would perform under state law applicable to individual and group market insurers and seek to achieve voluntary compliance from an insurer when there is a potential violation. If a state is unable to obtain voluntary compliance from an insurer, it can refer the matter to CMS for possible enforcement action.
The NPRM proposes the same approach for provisions that apply to providers and facilities, including air ambulances. The NPRM recognizes, though, that providers and facilities may not be regulated by the same entities responsible for provisions that apply to insurers and may include officials who regulate HMOs, directors of public health, or any other state department, agency, or board with applicable oversight authority over facilities and providers subject to the NSA. However, the departments do not provide further guidance on how states may assign authority over the NSA provisions that apply to facilities and providers.
The NPRM would authorize CMS to conduct random or targeted investigations and market conduct exams to verify compliance with NSA provisions applicable to insurers, health plans, providers and facilities. This would be in addition to the explicit authority under the NSA to conduct audits of health plan and insurer compliance with qualifying payment amount requirements. The departments propose to also apply this authority to compliance with Mental Health Parity and Addiction Equity Act (MHPAEA) non-quantitative treatment limit comparative analyses required under the CAA, as well as other provisions of the PHSA. HHS says this approach will allow for a more effective and efficient enforcement program that ensures consumers are getting the benefits and protections to which they are entitled without having to receive a complaint.Finally, the departments propose to have states be the primary enforcer against providers or facilities that provide services or items via telehealth to individuals located in the state even where the provider or facility is located in another state. Some states have relaxed licensure requirements in response to the COVID-19 public health emergency, allowing out-of-state providers to furnish services without a license from the state in which a patient resides.
HHS estimates that it will conduct about 200 investigations of NSA violations per month. This would seem to represent a greater role for direct federal enforcement of NSA compared to other federal laws, but it also suggests that HHS expects most enforcement will fall to the states. HHS seeks comment on all aspects of the proposed enforcement approach, including the proposed new authority to conduct random or targeted investigations and market conduct exams and the proposed enforcement approach for telehealth services provided out-of-state.
Additional Provisions in the NPRM
Beginning December 27, 2021, insurers offering individual market coverage or short-term limited duration must disclose direct and indirect compensation they provide to agents and brokers selling their products. These disclosures must be provided to consumers before they select a plan and upon enrollment. This requirement could be met by agents and brokers providing the disclosures on behalf on an insurer. All materials must meet language and accessibility requirements. Insurers would also have an obligation to report information on direct and indirect compensation to HHS annually.
States that have their own notice requirements for sales of short-term limited duration plans may want to consider and comment on how to coordinate these separate notice requirements. States that operate their own marketplace may want to consider if there are any operational issues with regard to plan shopping and enrollment, given that insurers are responsible for providing these notices directly to prospective enrollees and to those renewing coverage.
We are expecting at least one more rule on implementation of the NSA; there’s an Interim Final Rule under final review at the Office of Management and Budget. This outstanding rule and any that follow must detail how the independent dispute resolution (IDR) process will function, including guidance on how IDR entities must take into consideration the qualifying payment amount and any other factors in determining the payment to out-of-network providers. We are also awaiting guidance on the IDR process for uninsured individuals whose bills substantially exceed the cost estimate they received for their care.