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HomeHealth LawDMHC Steering Confirms that California Regulation, Not the Federal No Surprises Act,...

DMHC Steering Confirms that California Regulation, Not the Federal No Surprises Act, Governs Fee and Dispute Decision Processes for Sure Out-of-Community Providers Supplied in California

Govt Abstract

The California Division of Managed Well being Care (“DMHC”) issued a current steerage deciphering the appliance of the No Surprises Act (“NSA”)—a brand new federal legislation prohibiting out-of-network healthcare suppliers from balance-billing sufferers for sure emergency and non-emergency providers—in California.  Considerably, when figuring out which fee and dispute decision processes will apply in a dispute concerning the worth of non-contracted emergency and non-emergency providers, the NSA expressly defers to current state legislation which already protects sufferers from receiving “shock” medical payments, so long as such state legal guidelines conform to sure necessities set forth within the NSA.  The NSA refers to such qualifying legal guidelines as “specified State legislation[s]”.  Nonetheless, the NSA doesn’t explicitly point out which states’ current steadiness billing legal guidelines qualify as “specified State legislation[s]”—moderately, every state should independently overview the provisions of the NSA to find out if its current steadiness billing legal guidelines qualify.

The DMHC not too long ago issued an All-Plan Letter (“APL”) confirming that California legislation governing well being care service plans, as set forth within the Knox-Keene Well being Care Service Plan Act of 1975 and its implementing laws, constitutes “specified State legislation” and can proceed to manipulate out-of-network disputes for sure emergency and non-emergency providers supplied in California, moderately than the fee and dispute decision provisions of the NSA.  Nonetheless, in all states, the NSA governs disputes regarding air ambulance providers, not state legislation.

Background of the NSA

The NSA, which went into impact on January 1, 2022, limits the quantity an out-of-network supplier can cost for emergency providers, nonemergency providers supplied at in-network services, and air ambulance providers.  When a affected person receives providers lined by the NSA from an out-of-network supplier, the NSA typically caps the affected person’s price sharing obligation on the median in-network contracted fee that the well being plan agreed to pay for related providers from in-network suppliers for a similar providers in the identical geographic area.  As well as, the NSA additionally creates a dispute decision course of for out-of-network fee disputes.  Below the NSA’s “baseball fashion” dispute decision course of, when suppliers and payors can’t come to an settlement, either side submits a suggestion that an permitted Unbiased Dispute Decision Entity should choose between as the ultimate fee quantity.  The fee and dispute decision processes of the NSA don’t apply to each dispute, nonetheless.  Earlier than the enactment of the NSA, many states already had shock billing legal guidelines in place, and the NSA doesn’t totally preempt state fee requirements.  As an alternative, it expressly defers to the necessities of qualifying “specified State legislation[s]”—e.g., a qualifying steadiness billing legislation as specified by the NSA.  The NSA additionally envisions that states might revise their steadiness billing legal guidelines to qualify as “specified State legislation” in response to the passage of the NSA and its implementing laws.  See 86 Fed. Reg. 36,925 (July 13, 2021).

The DMHC’s APL Confirms the Software of the NSA in California

On March 21, 2022, the DMHC issued an APL confirming that California legislation qualifies as “specified State legislation” for: (i) non-emergency, noncontracted providers at an in-network facility by a noncontracted supplier; and (ii) out-of-network emergency providers.  Federal legislation governs disputes regarding out-of-network providers supplied by air ambulance suppliers.

  • The DMHC confirmed that the anti-balance billing legal guidelines enacted by California’s AB 72 are “specified State legislation[s]”, which apply when a non-contracted supplier offers non-emergency providers at an in-network facility: The DMHC concluded that California’s AB 72 is a “specified State legislation” governing the supply of out-of-contract non-emergency providers at a contracted facility, which subsequently continues to use moderately than the provisions of the NSA.  Below AB 72, the out-of-network reimbursement fee for out-of-network suppliers have to be larger than the plan’s common contracted fee or 125% of Medicare.  AB 72 additionally limits the enrollee’s cost-sharing quantity to the enrollee’s in-network fee.  And, because the DMHC acknowledged, AB 72’s definition of in-network services is broader than the NSA’s definition, as a result of it encompasses not solely hospitals and ambulatory surgical procedure facilities, but in addition laboratories, radiology, imaging facilities, and different outpatient facilities.  In its APL, the DMHC concluded that disputes governing these providers have to be resolved utilizing the DMHC’s Unbiased Dispute Decision Course of, not the NSA dispute decision mechanism.
  • The DMHC confirmed that California legislation, together with Knox-Keene Act provisions governing steadiness billing of enrollees for out-of-network emergency providers and associated case legislation, are “specified State legislation: As for out-of-network emergency providers, the DMHC concluded that California’s complicated authorized framework (together with the Knox-Keene Act, its implementing laws, and associated case legislation deciphering the identical) adequately prohibits suppliers from steadiness billing enrollees for out-of-network emergency providers, together with sure post-stabilization care.  Thus, the DMHC confirmed, this authorized framework qualifies as “specified State legislation” below the NSA.  Consequently, for out-of-network emergency providers, DMHC-licensed well being plans should proceed to adjust to California legislation concerning enrollee cost-sharing, supplier reimbursement, and the decision of disputes between plans and suppliers/services for out-of-network emergency providers.
  • The DMHC acknowledged that the NSA applies to disputes regarding air ambulance providers: Below the NSA, a plan that gives or covers air ambulance providers should impose the identical cost-sharing necessities for an out-of-network air ambulance supplier that will apply if the providers had been supplied by an in-network air ambulance supplier. The Knox-Keene Act likewise prohibits steadiness billing for out-of-network air ambulance providers.  Nonetheless, as a result of federal legislation (significantly the  Airline Deregulation Act of 1978) preempts state legislation on the “charges, routes and providers of any air service,” together with air ambulance suppliers, the DMHC concluded that California legislation doesn’t govern air ambulance disputes.  As an alternative, the DMHC concluded, plans should observe the NSA and its implementing laws when calculating reimbursement quantities for noncontracted air ambulance suppliers.

The DMHC said that it expects CMS to challenge an up to date letter according to its interpretation of California’s steadiness billing legal guidelines.  For extra info on how the NSA will have an effect on California well being plans and suppliers, please contact Sheppard Mullin’s healthcare litigation staff.



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