CMS Guidance Addresses External Review of Claims Involving Surprise Billing Matters

CMS has issued a memorandum providing guidance for group health plans, insurers, and states regarding external review requirements under the No Surprises Act, enacted as part of the Consolidated Appropriations Act, 2021 (CAA) (see our Checkpoint article). As background, these CAA provisions are intended to protect consumers from surprise medical bills in specified situations, including for certain emergency services, air ambulance services furnished by a nonparticipating provider (generally an out-of-network provider), and non-emergency services furnished by a nonparticipating provider at an in-network facility. Among other things, the protections require group health plans and insurers to provide external review for covered surprise billing matters in accordance with existing requirements, including use of either a state or federal external review process. In general, insurers, insured plans, and non-ERISA self-insured plans use state external review processes. The federal process is used by self-insured ERISA plans, and is also available for others in the absence of an ”applicable” (i.e., HHS-approved) state process. (An HHS webpage lists which states have an applicable external review process.) Interim final regulations amended existing external review regulations to include surprise billing matters for plan and policy years beginning on or after January 1, 2022 (see our Checkpoint article). This CMS memorandum offers additional guidance.

The memorandum explains that states are expected to modify their external review processes to accommodate surprise billing matters (i.e., to consider whether an adverse benefit determination complied with the No Surprises Act) but that the federal HHS-administered process may be used if a state’s process cannot yet accommodate these matters. A state with an applicable external review process that cannot accommodate surprise billing matters may direct insurers to use the HHS-administered external review process for surprise billing matters and still be considered to have an applicable external review process. These states are encouraged to refer such matters to the HHS-administered process on behalf of plans and insurers to avoid disruption to consumers. Insured coverage in states without an applicable process (including with regard to surprise billing matters) may satisfy the requirement to provide external review by using the HHS-administered process. The HHS-administered process, which is run by the federal contractor MAXIMUS, can accommodate external review of surprise billing matters as of January 1, 2022. The guidance includes instructions on using MAXIMUS, including timeframes, contact information, and details about the electronic filing system.

As an alternative to using the HHS-administered process, plans and insurers subject to a state process that cannot accommodate external review of surprise billing matters may instead contract with an accredited independent review organization (IRO) in accordance with applicable federal external review rules. The memorandum notes that this approach may require modifying existing IRO contracts and updating plan documents or benefit determination notices to address surprise billing matters. IROs should be able to conduct external reviews of surprise billing matters; otherwise, use of the HHS-administered process is encouraged.

Either federal process may be used for surprise billing matters until a state expands its process to accommodate external review of these matters. Once a state does so, the process will be considered an applicable external review process with respect to surprise billing matters.

EBIA Comment: This guidance should be helpful to plans and insurers implementing external review processes for surprise medical bills. It is also a reminder that claims processes and documents such as notices of adverse benefit determination should be reviewed from time to time. For more information, see EBIA’s Health Care Reform manual at Sections XII.B.3 (“Expanded Patient Protections: Surprise Medical Billing (Emergency and Non-Emergency Services)”) and XV.F (“Overview of External Review Requirements”). See also EBIA’s ERISA Compliance manual at Section XXXIV.M (“External Review Requirements”), EBIA’s Group Health Plan Mandates manual at Section XIII.B (“Patient Protections”), and EBIA’s Self-Insured Health Plans manual at Section XIII.C (“Federally Mandated Benefits”).

Contributing Editors: EBIA Staff.