Lauren W Gershuny, Counsel Genova Burns; With contributions from Katherine Szabo, Counsel, Genova Burns
The No Surprises Act, signed into law on December 27, 2020, is designed to protect consumers from surprise out-of-network emergency healthcare costs. To implement the law’s protections, agencies including the Office of Personnel Management and Departments of Labor, Health and Human Services, and Treasury recently issued a Notice of Proposed Rulemaking that, if passed, would create new reporting requirements for air ambulance services and compensation provided to agents and brokers.
The No Surprises Act will go into effect for health plans beginning on or after January 1, 2022, impacting almost all private health plans offered by employers, as well as non-group health insurance policies. The Act establishes many provisions to protect consumers, including a prohibition on out-of-network providers demanding payment of excess charges from patients. Similarly, health plans must cover surprise bills at in-network prices regardless of prior authorization. The Act specifically contemplates air ambulance transports as an emergency service that burdens consumers with surprise charges. Agencies such as HHS and Treasury have spent the last few months releasing regulations to ensure the Act’s requirements are met by the insurance and healthcare industries, culminating in the most recent rule focused on air ambulance services.
In an emergency requiring air ambulance transport, a patient’s inability to consider and select an in-network provider frequently results in unexpected medical bills. The Government Accountability Office found in 2019 that over two-thirds of air ambulance services were out-of-network, resulting in median bills between $36,000 and $40,000. Despite this study, the agencies acknowledge that there is a lack of useful data about the air ambulance industry. To fill that gap, the proposed rule requires plans, issuers, and providers of air ambulance services to disclose data for each air ambulance transport and claim in the two years required by the No Surprises Act. HHS and Treasury will use this data to prepare a report on the state of the air ambulance market for public review. The report will include the average charges for air ambulance services, the frequency of patient balance billing, and amounts paid by plans, issuers, and individuals for air ambulance transports.
The proposed rule also includes new disclosure guidelines regarding compensation paid to agents and brokers that enroll individuals in health insurance coverage, including short-term, limited-duration coverage. Issuers will be required to inform policyholders of this compensation before they enroll in or renew a plan, then again on documentation provided after enrollment. Disclosure should include commission rates and compensation, both direct and indirect, paid to the agent or broker that enrolls the individual. Under the rule, issuers will also have to report to HHS the total amount of direct and indirect compensation paid to the agent or broker in the preceding year.
The agencies are accepting comments on the proposed rule until October 18, 2021. The rule also establishes penalties for providers of air ambulance services that do not comply with reporting requirements. Failure to submit the data required by the No Surprises Act could result in civil monetary fines up to $10,000.
This content originally appeared in PIMA's Insights Magazine, 2021, Issue 2