No Surprises Act Regs Leave Out Broker Comp Disclosure Regs

Federal agencies have rolled out 411 pages of No Surprises Act regulations — without giving health insurance agents and brokers anything but one small hint about how they’ll implement the producer compensation disclosure section.

On July 1, the Centers for Medicare and Medicaid Services (CMS), and arm of the U.S. Department of Health and Human Services (HHS), posted a preliminary version of the new interim final rules, “Requirements Related to Surprise Billing; Part I.”

The best known sections of the No Surprises Act are supposed to protect users of individual and group health coverage against the risk that they will get huge, unexpected bills if they seek emergency care from hospitals outside their provider networks; get care from out-of-network providers at in-network hospitals; or use air ambulance services from out-of-network providers.

Another part, Section 202(c), is supposed to require agents, brokers and other people and companies involved with setting up and running health coverage arrangements, such as independent benefit plan administrators, to give the coverage users information about their compensation.

Federal agencies mention No Surprises Act Section 202(c) just once:

HHS intends to undertake rulemaking to implement requirements on health insurance issuers offering individual health insurance coverage or short-term, limited-duration insurance to disclose and report information regarding direct or indirect compensation provided to agents and brokers (section 202(c))… .

The reference to Section 202(c) implies that the federal agencies will apply extensive compensation disclosure requirements to agents who sell “short-term, limited-duration insurance” — short-term health insurance — as well as to agents and brokers who sell major medical insurance.

No Surprise Acts Machinery

Members of Congress included the text of the No Surprises Act into the Consolidated Appropriations Act, 2021, a big package of legislation that former President Donald Trump signed into law Dec. 27, 2020.

Some observers used to call the group of agencies that used to draft many major federal health insurance regulations — CMS, the IRS and the U.S. Labor Department’s Employee Benefits Security Administration — the “tri agency” group.

The administration of President Joseph Biden has started to add the U.S. Office of Personnel Management to the health insurance regulation drafting team, which could be described as a “quad agency group.”

The quad agency group has sent the preliminary version of the final interim No Surprises Act rules to the Federal Register for publication. The rules will take effect 60 days after the official publication date, according to the “preamble,” or official introduction to the regulations.

The quad agencies are asking for public comments on the regulations. Comments will be due 60 days after the official Federal Register publication date.

CMS is in charge of taking in and organizing the comments.

Drafters have included telephone numbers for several contact people. The IRS contact if Kari DeCecco, and the CMS contact is Lindsey Murtagh.

An interim final rule is a type of regulation that is created quickly, without going through a full public comment period and impact analysis in advance. Because an interim regulation is created so quickly, without a full review process, courts may be less inclined to support an agency that tries to punish an individual or company for any interim regulation violations, according to the American Action Forum, a group that has been critical of heavy use of interim final rules.

No Surprises Act Section 202(c)

No Surprises Act Section 202(c) is supposed to require insurance agents, insurance brokers and benefits consultants to disclose any compensation arrangements related to individual health insurance policies or commercial group health plans entered into, renewed or extended after Dec. 27, 2021, according to a comment letter submitted by Janet Stokes Trautwein, the CEO of the National Association of Health Underwriters (NAHU).

Trautwein listed many NAHU concerns about the provision, including:

  • * How producers should handle compensation disclosures provided in advance, when the final amount of compensation may be hard to predict.
  • * What happens when producers correct the preliminary compensation forecasts they provided.
  • * What a good compensation disclosure should look like.
  • * How brokers should handle indirect compensation, such as override commissions paid to an entire insurance brokerage firm rather than to one broker.
  • * How to handle employers’ utter lack of awareness of the new compensation reporting requirements.
  • * Concerns about imposing new reporting requirements on employers as they’re coping with the impact of the COVID-19 pandemic.
  • * How to treat disclosure rules for products that fall somewhere between ordinary individual health coverage and ordinary group health coverage, such as individual coverage health reimbursement arrangements, or ICHRAs.

Because so many people could end up seeing the No Surprises Act producer compensation disclosure notices, full implementation of that comp disclosure program could influence pay disclosure efforts for many other types of financial services professionals, and, possibly, for many performance-based advisors and companies outside of the financial services sector.

Stabilization Care and Post-Stabilization Care

The new interim final rules address many topics.

One is the definitions used to describe the kind of care that is subject to the out-of-network emergency care billing rules.

The federal Emergency Medical Treatment and Labor Act, or EMTALA, now requires hospitals to provide “emergency services” for  a patient with an “emergency medical condition,” and “to stabilize” that patient before sending the patient away, even if the patient has no way to pay for care.

The No Surprises Act applies the new billing rules to emergency care provided starting from the time a patient comes in with an “emergency medical condition” that involves “acute symptoms of sufficient severity (including severe pain) such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention.”

The No Surprises Act emergency care period includes many services that a hospital or doctor might see as “post-stabilization services.”

One of the requirements for a hospital to post-stabilization care as non-emergency care is that “the attending emergency physician or treating provider must determine that the participant, beneficiary or enrollee is able to travel using medical transportation or nonemergency medical transportation to an available participating provider or facility located within a reasonable distance, taking into consideration the individual’s medical condition.”

In theory, the new No Surprises Act emergency care and post-stabilization care definitions could eventually affect how regulators and courts interpret the comparable EMTALA provisions, and they could spur Congress to revise the requirements in the EMTALA statute.

All-Payer Model Agreement

The No Surprise Act and the new regulations could spur many states to consider adopting All-Payer Model Agreements similar to those adopted by Maryland, Pennsylvania and Vermont.

Those states have laws that regulate how providers and “payers” should handle out-of-network medical bills.

In the states without model act provisions, parties can resolve billing disputes by using some other state law; health care services cost data gathered by HHS; or, in some cases, a mediation process.


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