Pathology/Lab Coding Alert

No Surprises Act:

Check Out the Latest NSA Final Rule Impact for Your Lab

Published on Wed Nov 09, 2022

Don’t miss the effect of court decisions.

The Feds are modifying the No Surprises Act (NSA) yet again, so we have the lowdown on what you need to know to keep your lab billing on the up and up.

Look back: The feds first drafted the NSA in the Consolidated Appropriations Act, 2021 (CAA) in December 2020 to alleviate “surprise billing” or balance billing from out-of-network providers, especially when the patient receives emergency services. Balance billing is the practice of billing the patient for the difference between out-of-network provider rates and the patient’s in-network negotiated rates.

Process: The NSA established an independent dispute resolution (IDR) process effective 30 days after billing payment disputes remain unresolved. A certified IDR “entity” will evaluate the qualifying payment amount (QPA) and issue a binding decision to settle the case.

Update: Following court cases and interim rules, “Requirements Related to Surprise Billing: Final Rules” was published in the Federal Register on Aug. 26. The final rule clears up some issues related to the IDR and QPA. This latest rule is a follow-up to prior rulemaking, Parts I and II, published as interim final rules in July and October of 2021, respectively.

Clarify NSA Influence on Lab Billing

Although the NSA applies across the board to emergency services, the rule also impacts lab services provided by an out-of-network lab for a specimen taken when the patient receives nonemergency services at an in-network facility. That means labs must know whether the patient received services in-network, whether emergency or not, before deciding how to bill the for the lab tests.

Also: Labs aren’t subject to NSA rules if the lab test is not covered by the patient’s insurance, or if the patient comes to the nonparticipating lab for specimen collection.

Do this: Labs can update intake software and requisition forms to glean information from the ordering provider that will allow the lab to determine if NSA applies in the particular lab order.

Here’s What Swayed the NSA Changes

CMS’ guidance on the NSA has evolved toward the latest final rule. Court decisions by the U.S. District Court for the Eastern District of Texas on Feb. 23 and July 26, 2022, vacated certain parts of the October 2021 interim final rule related to the independent dispute resolution (IDR) process and qualifying payment amount (QPA) decisions.

Under the October 2021 interim final rule, “the Departments promulgated rules regarding the Federal IDR process, specifically with respect to the factors that an IDR entity must consider and directing it to select the offer that was closest to the QPA,” note attorneys Lynsey Mitchel, Carmen Jule, and Jarrod Brodsky with law firm Sheppard Mullin, in online legal analysis. “These interim final rules were challenged in court and subsequently vacated,” Mitchel, Jule, and Brodsky explain.

In fact, the legal challenges and public commentary on Part II caused the agency to release this third reform, CMS says. “These final rules specify that certified IDR entities should select the offer that best represents the value of the item or service under dispute after considering the QPA and all permissible information submitted by the parties,” the fact sheet clarifies.

“The Final Rules provide some certainty for providers and facilities (collectively, Providers) who were left wondering how the IDR process would move forward given the pushback it had received from the courts,” point out attorneys Kirk Davis and Danielle Gordet with law firm Akerman LLP in online legal analysis. “The qualifying payment amount (QPA) is no longer the presumptive factor in payment determinations,” note Davis and Gordet.

Instead, the certified IDR entity must factor in the QPA and “all additional permissible information submitted by each party to determine which offer best reflects the appropriate out-of-network rate,” the fact sheet mentions. This extra information can’t include data “prohibited by the statute” either, warns the agency.

Certified IDR entities are also advised to evaluate information to verify credibility and “avoid double counting information that is already accounted for by the QPA or by any of the other information submitted by the parties,” CMS requires. Only after these assessments should the certified IDR entity decide on the offer pertaining to the value of the disputed item or service.

QPA: The final rules also beef up information disclosure requirements for group health plans and health insurance issuers about QPAs discussed in the July 2021 interim final rule. And CMS defines “downcoding” in the final rules and offers an update to circumvent this practice.

“Downcoding occurs when payers change, add, or remove service codes from processed claims, which may result in payment of lower amounts,” note attorneys Alison Lima Andersen, Carolina Turner English, and D. Austin Rettew with law firm ArentFox Schiff LLP. “Under the new rule, payers must provide additional information related to ‘downcoded’ claims, including a rationale or explanation justifying the downcode, and the amount that would have been the QPA had downcoding not been applied,” Lima Anderson, Turner English, and Rettew add in online legal analysis.