Enacted in January 2022, the No Surprises Act (NSA) establishes patient protections from surprise bills related to unexpected medical costs for emergency services received from out-of-network (OON) providers. As a part of the NSA, health plans are required to establish a process, in accordance with the CMS Interim Final Rule (IFR) requirements, to determine the maximum patient cost-share amount that payer organizations can set for qualified items and services rendered by certain providers and facilities. To determine these cost-share amounts, payers have the responsibility to develop qualifying payment amounts (QPAs), which reflect the median in-network (INN) rate for these services.
NSA’s penalty for payer non-compliance is $100 per affected member per day of non-compliance. Additionally, issues with QPAs can be detrimental for the payer in the Independent Dispute Resolution (IDR) process, in which an arbiter considers the QPA when validating provider payments. Compliance, however, requires careful application of complex IFR requirements to real-world network contracting and reimbursement practices.
QPA calculation / maintenance challenges for payers
Calculating QPAs is a complex, multi-layered process, which often requires interpretation of compliance that considers plan-specific contracting terms. A health plan must select and/or derive comparable rates from which to calculate a median contracted rate.
Rates utilized to calculate QPAs must have the same set of defining components, which include the procedure code, the specialty of the provider rendering the service, the geographic location of the provider, the service category (outpatient setting, physician office setting, etc.), and insurance market (for example, employer group or individual plans).
Complexities of the QPA calculation process include:
- Treatment of percent-of-charge rates (where a per code rate depends on claim-specific charges)
- Applying claim-level case rates to service line-level codes (e.g., CPT codes) appropriately
- Definition and construction of unique contracted entity rates and terms
- Ensuring QPA completeness across service codes for all MSAs, market segments, specialties, etc., while complying with rate sufficiency rules
Maintenance of QPAs introduces further complexity through items such as:
- QPAs must be updated annually using the appropriate inflation index (CPI-U)
- Newly released service codes must also have QPAs, which are calculated by following the IFR “New Code” process
- QPAs for service codes which did not have sufficient information initially, but now do
- Support for provider/member inquiries and potential audits
Opportunities for payers
Although compliance with NSA can require significant effort and investment, the NSA also affords some opportunities that payers can take advantage of.
Expanding provider networks
- Providers may be more incentivized to contract in-network than before the NSA:
- Providers lost the ability to balance bill members in a considerable number of scenarios. In some cases, providers could be paid less out-of-network than if they were contracted in-network due to the loss of balance billing.
- Reduces likelihood of payment disputes and costs associated with the IDR process
- In-network payments are more clearly defined at a service level instead of an out-of-network payment defined by the payer
- Payers can capitalize on adding providers to their networks:
- Expanded networks are beneficial and marketable to members and customers
- More in-network providers can help meet network adequacy standards
- In-network reimbursement generally requires less administrative effort, including avoidance of IDR, avoidance of single case agreements, etc.
- Larger networks are good for streamlining network administration
Emphasizing member and customer benefits from successful payer compliance with NSA
- Generate goodwill from members and customers through communicating that payer efforts to build and manage accurate QPAs best enable the NSA to benefit them
- Communication and education services to members and customers about the protections that the NSA affords, including how to preserve those protections at the site of care and how to interpret changes to explanations of benefits (EOBs)
By looking beyond a pure compliance lens and exploring the opportunities that can be created besides a check-the-box exercise, payers can continue to position their organization for long-term growth and success.