December 8, 2022
The Federal No Surprises Act (FNSA), part of the Consolidated Appropriations Act 2021 (CAA), provides federal protection for patients against surprise bills. In situations covered by the FNSA, patients must pay only the in-network cost-sharing amount for these services. The FNSA also prohibits providers from balance billing, which removes the patient from billing disputes. Health plans and issuers must pay the out-of-network (OON) provider, facility, or provider of air ambulance services an amount based on a state All-Payer Model Agreement or specified state law, if applicable. Without an All-Payer Model Agreement or specified state law, the plan must make an initial payment or a denial within 30 calendar days. If either party believes the payment amount is inappropriate, they can enter into a 30-day open negotiation period. If the open negotiation is unsuccessful, either party may request to initiate the federal independent dispute resolution (IDR) process.
Initially, Premera implemented FNSA provisions in Alaska based on the understanding that Alaska did not have a state All-Payer Model Agreement or specified state law that would regulate the pricing of certain out-of-network claims. As such, claims that qualified for protection under the FNSA were priced based on the qualified payment amount (QPA). The QPA for a given item or service is generally the median contracted rate for the same or similar item or service.
Further discussions with the DOI determined that Alaska's administrative code (3 Alaska Admin. Code § 26.110(a).) meets the criteria of a specified state law. The Alaska administrative code requires carriers to base payments on the 80th percentile rather than the QPA. Providers billing for services that fall under the No Surprise Act, which are paid based on the Alaska 80th percentile, still cannot balance bill the member.
As a result, we are updating the pricing methodology used for insured business in Alaska back to January 1, 2022. We will also reprocess any insured claims initially paid using the QPA and issue updated EOPs (explanation of payment) to providers and EOBs (explanation of benefits) to members. Because the 80th percentile is generally higher than the QPA, member cost-shares on the impacted claims will increase unless the member had previously satisfied their out-of-pocket maximum for the year. We will begin adjusting impacted claims on December 12, 2022.
Please note that the requirements in the Alaska statute do not apply to FEP, self-funded, or Optiflex groups; claims payment will continue to be based on the QPA, and the federal IDR process will be available as appropriate.