The Fact of the Month
Here’s something to talk about when discussing plan design options and employer contribution strategy with group clients in the New Year.
New federal surprise billing protections will shield consumers from many payment nightmares starting on January 1, 2022, but the new law does not protect against surprise bills related to ground ambulance transportation. Making clients aware of this limitation is critical. A national analysis of 2018 large employer claims data found that “51% of emergency ground ambulance rides and 39% of non-emergency ground ambulance rides included an out-of-network charge for ambulance-related services, putting the patient at risk of a surprise medical bill.”
The Big Three
Each month GPAHU identifies three top public policy or legal developments that could impact our members and clients. Here are this month’s big three!
Biden Administration Issues Initial Surprise Billing Regulations
In December of 2020, Congress included federal protections against surprise balance medical bills in COVID-19 relief legislation known as the Consolidated Appropriations Act of 2021. The provisions impact almost all individual and group health plans and will go into effect nationwide on January 1, 2022. To help implement them, the Biden Administration released an interim final rule. Some key things brokers should know to communicate with clients include:
- The federal balance billing protections apply to emergency care at out-of-network facilities, air ambulance transport, and certain kinds of out-of-network treatments and providers if the point of care is an in-network hospital or facility.
- Beneficiaries must pay the in-network rate for the care and services covered by the law. Cost-sharing cannot be higher than if an in-network doctor provided such services, and any coinsurance or deductible must reflect in-network provider rates.
- In some cases, existing state laws on balance billing may be preempted by the federal requirements. In others, the state laws might stand or partially stand.
- The law includes some compliance responsibilities for employers that offer group health insurance coverage. They are required to explain the surprise billing protections to plan participants by (1) making a notice publicly available, (2) posting the notice on a public website of the plan or issuer, and (3) including it on each explanation of benefits. The rule includes a template notice and clarifies that good faith compliance relief applies if you use it. Carriers will most likely take care of the notification for fully-insured groups, but self-funded groups will need to take compliance responsibility.
- The regulation makes significant changes to what will be considered covered emergency care moving forward. Previously, if a person went to an out-of-network emergency room to qualify for in-network cost-sharing, the precipitating medical event would have to meet the “prudent layperson” definition of an emergency. Carriers and third-party administrators then paid claims and applied cost-sharing based on the provider’s billing code and if it was for an “emergency” condition. Now they will need to evaluate each case on a “facts and circumstances” basis. Put another way, if a person seeks any care in an out-of-network emergency room, it’s almost sure to be covered.
- Emergency care will include not just the initial evaluation and emergency treatment but also post-stabilization care. Emergency rooms can be both in a hospital and free-standing, including an urgent care center licensed to provide emergent care. Also, the only way a health insurance carrier or self-funded plan can limit emergency care based on plan terms or conditions is to coordinate benefits. Restrictions like waiting periods and general plan exclusions cannot apply.
- All of these changes to emergency care may mean that carriers and employer plans need to update the terms of their plan documents.
- If a plan gets a bill from an out-of-network provider governed by the surprise billing law, they have 30 days to either send an initial minimum payment amount or deny the claim. If a provider does not accept payment, the parties have 30 days to resolve the matter privately.
- Suppose the parties do not resolve the billing issue within 30 days. In that case, the plan must make a payment to the provider and base any cost-sharing on: (1) an amount determined by an applicable state All-Payer Model Agreement; (2) if there is no applicable All-Payer Model Agreement, an amount specified by state law; (3) if there is no All-Payer Model Agreement or prevailing state law, then the lesser of the billed charge or the plan’s or issuer’s median contracted rate. If the provider doesn’t accept payment based on those methodologies, they could trigger the independent dispute resolution process.
- Since self-funded plans (including level-funded plans) are not subject to state laws, they do not have to use a state All-Payer Model Agreement, or the state law’s defined payment amount unless they voluntarily choose to do so.
- This regulation is only the first of several that will be released soon to execute the new protections. More rules will follow soon on how the arbitration process and air ambulance cost assessments will work.
New Pennsylvania Initiative Hopes to Deliver Innovative Insurance Solutions
Pennsylvania Insurance Commissioner Jessica Altman recently announced the commencement of a new state program to encourage the development of innovative new insurance solutions and products. Keystone Smart Launch (Smart Launch) will help to reduce barriers and speed up the regulatory process so Pennsylvania can offer cutting-edge services to its consumers and industry professionals.
The Pennsylvania Insurance Department (PID) urges people and businesses to submit ideas for insurance products and services that use newly developed designs or technologies, including ones that may depart from the traditional regulatory framework. Anyone who wants to submit an idea should use the Smart Launch Idea Portal. Once submitted, the PID’s staff who serve on the Smart Launch team will go through an internal review. The PID will reach out to the submitter to provide information regarding the regulatory process and highlight potential considerations regarding consumer protections. The PID hopes that addressing these considerations from the beginning may help facilitate a faster method to get innovative ideas into the market. For more information about the Keystone Smart Launch program and to submit ideas for review, please visit www.insurance.pa.gov/SmartLaunch.
Pilot Program to Expand Insurance Licensure
To help more Pennsylvanians get insurance licenses if they are qualified, the Pennsylvania Insurance Department (PID) is starting a pilot program to assist people with criminal records interested in obtaining a resident producer license in the Commonwealth. The Preliminary Licensing Determination program will guide applicants with criminal records on how their specific convictions, history, and background may affect their ability to apply for formal licensure in Pennsylvania successfully.
Some criminal convictions will prevent a person from becoming a licensed insurance producer, but many others do not. The pre-licensing determination process will help applicants understand if their criminal convictions will preclude them from licensure without first having to go through the expense of pre-licensing programs and the formal application process.
The new program is entirely optional. Individuals can submit a screening application on PID’s website, including information on their charges and convictions, the circumstances surrounding their conviction, and all relevant court documents. Submissions are securely sent electronically to a PID determination specialist. The specialist will review the case and make a final determination; applicants will get results through the mail. The program is now available to Pennsylvania residents at www.insurance.pa.gov/Licensees/pre-licensing-determination/.
Check This Out!
If you want to expand your health policy knowledge beyond this newsletter, here is a resource to check out!
All kinds of data are available via the Peterson-KFF Health System Tracker, an online information hub dedicated to monitoring and assessing the performance of the U.S. health system.