FAIR Health Data Support State and Federal Surprise Billing Laws

May 16, 2024

FAIR Health data serve in a variety of ways as an official reference point for state surprise billing laws in Connecticut, Georgia, New Mexico, New York and Texas. In addition, FAIR Health data help health plans, providers and arbitrators determine reimbursement amounts under the federal surprise billing law, the “No Surprises Act” (NSA).

Support for State Surprise Billing Laws
State laws that protect patients from surprise billing vary in their details, as do the ways that FAIR Health data support those laws.

Connecticut. The Connecticut surprise billing law provides that out-of-network professional emergency and laboratory services are to be reimbursed at the highest of three categories: the in-network amount for the service, the “usual, customary and reasonable rate” (UCR) or the Medicare rate. Pursuant to the law, the Connecticut Insurance Commissioner designated FAIR Health’s 80th percentile charge benchmarks for healthcare services as the UCR to be used.

Georgia. In Georgia, the Office of Commissioner of Insurance and Safety Fire (OCI) selected FAIR Health data as the official source for the “contracted amounts” prescribed by the state’s Surprise Billing Consumer Protection Act and implementing regulations. The Act requires insurers to reimburse out-of-network emergency and surprise bills at the median contracted amount among payors in 2017, CPI-adjusted, for each of the “Geo Rating Areas” established for purposes of the Affordable Care Act in Georgia. OCI contracted with FAIR Health to create a custom benchmark dataset for use by stakeholders in Georgia.

New Mexico. New Mexico’s Office of the Superintendent of Insurance (OSI) selected FAIR Health’s benchmark data for determining reimbursement amounts under the state’s Surprise Billing Protection Act. The Act sets a reimbursement rate for surprise medical bills at the 60th percentile benchmark for allowed amounts from 2017 as reported in a benchmarking database maintained by a nonprofit organization specified by OSI, provided that no payment is less than 150 percent of the Medicare reimbursement rate. OSI designated FAIR Health as the benchmarking database, which must be conflict-free and unaffiliated with any healthcare stakeholder.

New York. Under New York’s emergency and surprise billing law, patients are protected from “surprise” bills, and health plans and providers may seek “baseball” arbitration for payment disputes. (Baseball arbitration is a process in which each side submits a final offer and the arbitrator selects between them.) In making a decision, the arbitrator must consider several factors, including the “usual and customary cost” (UCC) for the service, defined as FAIR Health’s 80th percentile charge benchmark.

Texas. Texas enacted a surprise billing law adopting a baseball arbitration model for disputes about emergency and surprise bills for professional, laboratory and imaging services. Arbitrators must consider several factors, among them the 80th percentile of billed charges and 50th percentile of allowed amounts for the service in the area where it was rendered. Pursuant to the law, the Texas Department of Insurance (TDI) was required to select a database maintained by an organization unaffiliated with any healthcare provider, plan or other stakeholder. TDI selected and contracted with FAIR Health to license and distribute FH® Benchmarks to TDI, arbitrators and other stakeholders in Texas.

Support for the Federal Surprise Billing Law

The federal NSA applies to health plans in states that do not have a specific state law concerning surprise bills, and to self-insured health plans that are not covered by such state laws. For plans subject to the federal law, FAIR Health offers data to support the determination of Qualifying Payment Amounts (QPA) under the NSA.

The NSA requires plans to calculate patients’ cost-sharing responsibilities for certain surprise medical bills using the plan’s QPA. The QPA is the payor’s median contracted amount for each procedure code in each market and geographic area it covers. When payors have insufficient provider contracts to calculate the applicable median contract amount, they must use an independent database to calculate the QPA and determine the patient’s cost-sharing obligations. Plans can use FAIR Health data to calculate the QPA in these situations. FAIR Health’s solution, the FH® NSA Reference File, makes available median in-network allowed amounts for procedure codes in geographic areas that align with NSA requirements. The data also may inform the plan’s selection of an initial payment to out-of-network providers, potentially reducing disputes and the need for arbitration.

According to guidance from the departments responsible for implementing the federal NSA independent dispute resolution (IDR) process, certified IDR entities are permitted to consider pricing information from databases that disputing parties may submit in support of their offers, so long as those databases do not include any prohibited factors under the statute (e.g., billed charges, UCR and rates that would have been paid by a public payor). FAIR Health’s FH NSA Reference File and FH® Allowed Benchmarks reflect the allowed amounts negotiated between commercial payors and in-network providers—not the prohibited factors. Hence, FAIR Health’s FH NSA Reference File, as well as data from FH Allowed Benchmarks, may be licensed by payors and providers for use in the federal IDR process—including during the prescribed negotiation period, and to inform disputes before IDR entities.

For more information on how FAIR Health’s data support surprise billing laws, contact us by email at info@fairhealth.org or call us at 855-301-FAIR (3247), Monday through Friday, 9 am to 6 pm ET.