In a recent audit, the Centers for Medicare & Medicaid Services (“CMS”) uncovered non-compliance by Aetna Health Inc. of Texas (“Aetna”) in calculating key payment information for air ambulance services under the No Surprises Act (“NSA”). These audit results highlight the ongoing challenges faced by providers and payors in ensuring the compliant implementation of the NSA. 

The NSA was enacted to protect patients from unexpected medical bills, also known as “surprise bills.” These bills typically arise when patients receive out-of-network care during emergencies or when they receive non-emergency services at in-network facilities. The NSA protects patients against “surprise bills” by limiting patients’ financial obligations to the cost-sharing amounts that they would have paid in-network. 

Under the NSA, disputes over the appropriate rate of reimbursement due to providers are routed through a dispute resolution process that starts with an open negotiation period. Absent a negotiated resolution, there is a “winner-take-all” or “baseball-style” arbitration process. In the arbitration process, an independent dispute resolution entity (“IDRE”) considers different factors in the context of the dispute and will select between the competing offers advanced by the provider and health plan. In choosing an offer, IDREs consider numerous factors, including the (1) provider’s skill and experience, (2) the patient’s acuity, and (3) the median in-network rate for similar services in the same region, known as the Qualifying Payment Amount (“QPA”).[1]

CMS’s audit of Aetna’s reimbursement practices for air ambulance services revealed that Aetna had failed to comply with several key NSA legal requirements. 

Most notably, CMS found that Aetna supplied inaccurate information with respect to factors that IDREs consider in determining whether to side with the health plan or provider in dispute resolution. Specifically, the audit revealed that the QPA was incorrectly calculated in multiple instances because claim paid amounts were used instead of contracted rates, and that each claim was counted as a separate contracted rate, even when claims were identical and from the same provider. These discrepancies of the QPA calculation methodology impacted five QPAs across four HCPCS codes (A0430, A0431, A0435, A0436), resulting in both higher and lower QPAs. 

Second, the audit also revealed a failure to provide compliant disclosure statements. For instance, in one case, the audit found that an inaccurate statement was provided regarding when providers may initiate the arbitration process following the conclusion of the open negotiation period. CMS determined that the disclosures on the Explanation of Benefits that were issued with the payments for the disputed services did not meet regulatory requirements. These misstated deadlines can be significant because accurate and timely disclosures help ensure parties can initiate the negotiation and arbitration processes within contractual or regulatory timeframes. Aetna has since updated its system to include the required disclosure language and to conduct a self-audit to identify any non-compliant claims. 

The audit also identified that Aetna did not share the QPA in remittance advices sent with initial payments or notices of denial of payment for air ambulance services. Under the NSA, insurers must provide the QPA to ensure transparency and to enable providers to collect outstanding revenue. According to CMS, Aetna did not include this information and, thus, did not meet the disclosure requirements set forth by the NSA, potentially affecting the accuracy and fairness of payment calculations for providers and patients. In response, a QPA field was added to remittance advices and all other disclosures provided with initial payments and notices of denial of payment and reprocessed the identified claim to include the necessary QPA information. To address any further potential non-compliance, Aetna will also conduct self-audits to identify and rectify additional claims where the QPAs were missing or incorrect. 

What’s Next? Ongoing Compliance Amidst Continued NSA Implementation

CMS’s audit underscores the complexities and intense scrutiny involved in implementing the NSA, emphasizing the critical need for vigilant compliance. Compliant disclosures are crucial for safeguarding appellant and consumer rights and for ensuring timely initiation of each phase under the NSA. Meanwhile the enforcement landscape for awards issued under the NSA remains murky, and future CMS audits may target non-compliant providers, too. Accordingly, health care participants should retain skilled counsel to navigate NSA compliance and avoid CMS scrutiny as the law in this area continues to evolve. 

[1] For reference, the QPA has already been the subject of multiple lawsuits, with providers represented by the Texas Medical Association separately challenging both the deference owed by IDREs to the QPA, as well as its underlying calculation methodology. Stay tuned for an update regarding a recent Fifth Circuit opinion deciding (for now) one of these issues…