SURPRISE! Impact of Recent Federal Regulations on Texas Injury Benefit Plans

By Richard S. Johnson, EVP, PartnerSource

What is the ‘Surprise Billing Final Rule’?

If you have ever had a major medical procedure, you know the “sticker shock” of getting a hospital or surgeon bill that you thought your group health plan would be paying in full. The federal government refers to this practice as “surprise billing.”

Specifically, surprise billing occurs when an out-of-network medical provider bills patients for the difference between (1) the provider’s billed charges, and (2) the amount paid by the group health plan and/or patient when patients receive medical services from out-of-network medical providers (including air ambulance providers) while undergoing medical treatment at in-network medical facilities. 

In the fall of 2022, the U.S. Departments of Health and Human Services, Labor and the Treasury, along with the Centers for Medicare & Medicaid Services, issued a Final Rule titled “Requirements Related to Surprise Billing: Final Rule,” which is designed to protect patients from surprise billing. The Surprise Billing Final Rule applies to HIPAA, the Affordable Care Act (PPACA) and the Medicare Secondary Payer (MSP) Act.

The Final Rule provides the following processes when open negotiations between medical providers/facilities and health plans/uninsured patients do not result in an agreed-upon payment amount:

• Establishing an independent dispute resolution (IDR) process to determine out-of-network payment amounts between medical providers/facilities and health plans.
• Requiring medical providers to submit good faith estimates (including supporting information) of medical items or services for uninsured patients.
• Establishing an additional patient-provider dispute resolution process for uninsured patients to determine payment amounts due to providers/facilities in certain situations.
• Providing an additional way for patients to appeal certain health plan decisions.
  

The Final Rule complements rules that require group health plans and air ambulance providers to submit certain information to consumers regarding prescription drug and health care spending. These rules intend to better inform consumers who are disputing or negotiating out-of-network billing.

IMPACT ON TEXAS INJURY BENEFIT PLANS

Despite receiving several requests over the past 25 years, the federal government has refused to provide concrete guidance regarding the impact of HIPAA and PPACA on Texas Injury Benefit Plans. 

Nevertheless, PartnerSource has long taken the position that Texas Injury Benefit Plans are not subject these group health plan laws because Texas Injury Benefit Plans only offer “excepted benefits.” Texas Injury Benefit Plans are more consistent with similar property and casualty programs (like workers’ compensation, no-fault auto coverage and liability insurance) that both HIPAA and PPACA exempt from group health plan requirements.  

With respect to Medicare compliance, PartnerSource has also taken the position that Texas Injury Benefit Plans meet the definition of liability and/or no-fault insurance under the Medicare Secondary Payer (MSP) Act – and are not subject to MSP requirements applicable to workers’ compensation or group health plans.

BOTTOM LINE

PartnerSource does not believe that the new Final Rule for surprise billing applies to Texas Injury Benefit Plans. 

However, employers, claims administrators and other Texas Option Program vendors must be prepared to respond to injured Texas employees and plaintiff attorneys that may seek to use these rules for contesting Plan medical payments. Conversely, these Texas Option Programs stakeholders could potentially use this Final Rule to their advantage when negotiating out-of-network provider bills (particularly hospital bills) for purposes of Plan medical payments, subrogation, Medicare liens and contesting plaintiff attorney damages.

If you have any questions, please contact Richard Johnson or your PartnerSource team leader for more detail on HIPAA and PPACA “excepted benefit” rules and the impact on Texas Injury Benefit Plans.