No Surprises Act Guidance on Out-of-Pocket Maximums and Facility Fees

Employers have some new clarity on the No Surprises Act rules on out-of-network providers and charges under new guidance from the U.S. Department of Labor, U.S. Department of the Treasury, and the U.S. Department of Health and Human Services. The guidance—issued July 7, 2023, in the form of answers to frequently asked questions (FAQs)—also suggests that the agencies plan to issue rules on healthcare facility fee transparency, while noting that several state legislatures have proposed or enacted laws to limit or require disclosure of such fees.

Quick Hits

• The DOL, HHS, and Treasury issued clarifying guidance on rules under the No Surprises Act regarding out-of-pocket maximums and facility fees.
• The guidance addresses cost sharing, the definitions of out-of-network providers and facilities, and facility fees.
• The agencies stated that future regulations would address facility fees.

The Affordable Care Act (ACA) caps out-of-pocket expenses that a plan can charge for essential health benefits. These caps do not apply to balance billing amounts, amounts spent on items and services not covered by the plan, or out-of-pocket amounts an enrollee may spend on out-of-network items and services, even if they are covered by the plan. However, a plan can choose to count an individual’s out-of-network expenses toward the out-of-pocket maximum.

The No Surprises Act added some additional restrictions with respect to out-of-pocket cost-sharing amounts for out-of-network emergency and air ambulance services, and for out-of-network services (such as anesthesiology and radiology) provided by in-network facilities. For these services, cost-sharing amounts must be determined as if the services were in-network, and they must count toward in-network deductibles and out-of-pocket maximums.

The FAQ guidance covers three specific areas:

No Surprises Act Cost Sharing

The guidance clarifies that out-of-pocket cost-sharing amounts for No Surprises Act services (out-of-network emergency and air ambulance services and out-of-network services provided by in-network facilities) must count toward in-network deductibles and out-of-pocket maximums. With the high cost of air ambulance services and certain emergency services, this would likely result in the enrollee’s out-of-pocket maximum being immediately satisfied and the plan paying 100 percent toward covered services for the rest of the plan year.

Out-of-Network Providers and Facilities Defined

The No Surprises Act regulations define an out-of-network provider or facility as one that does not have a direct or indirect contractual relationship with a health plan. Some employers have contractual relationships with providers or facilities without treating them as in-network for purposes of out-of-pocket maximums. The guidance provides that plans may treat such providers and facilities as in-network for purposes of the No Surprises Act, but then must also treat them as in-network for purposes of the maximum out-of-pocket limit. Conversely, plans may not treat the same provider or facility as out-of-network for purposes of the out-of-pocket maximum, in which case cost-sharing amounts need not be applied to the out-of-pocket maximum, and in-network for purposes of the No Surprises Act, bypassing the balance billing ban and the requirement to treat cost-sharing amounts as if in-network.

Facility Fees

Finally, the agencies expressed concern over increasing facilities fees for health care that plan participants received outside of hospital settings. For example, an individual who receives services from a local physician’s office may end up with a bill that includes a hospital facility fee simply because a hospital owns the physician’s practice.

Facility fee expenses are covered by the Transparency in Coverage rules in the ACA. The guidance points out that although enforcement of the No Surprises Act’s advanced explanation of benefits requirement has been deferred until further notice by the agencies, facility fees will be subject to disclosure in advanced explanations of benefits when the requirement goes into effect, and that future implementing regulations will specifically address facility fees.

Ogletree Deakins’ Employee Benefits and Executive Compensation Practice Group will continue to monitor developments and will publish updates on the Employee Benefits and Executive Compensation blog as additional information becomes available.

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