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Industry Insights

The Cost of Directory Noncompliance Under the No Surprises Act

By: Dyana Williams, Client Manager, LLS RCM Solutions

One of the less familiar provisions in the No Surprises Act is a requirement for in-network health plan provider directories to be maintained and verified no less than every 90 days. These rules apply to providers, facilities, and health plans, and offer no exemptions for any category of provider or facility. It’s a rule meant to be enjoyed by everyone!


What is a Provider Directory?

For a bit of context, a provider directory provides health plan subscribers information about in-network providers and facilities for all affiliated individual health care providers, medical groups, clinics, or health care facilities. Patients utilize this information to aid them in seeking care from contracted providers so their cost-sharing obligations (such as co-pays, deductibles, etc.) under their plan are reduced.

Collaboration between the provider/facility and health plans is critical in supporting the main objectives of the No Surprises Act: Making access to affordable healthcare easier; and reducing surprise billing situations faced by patients. The provider and health plan share responsibility to:

  • Limit situations in which the amount that is billed to a patient changes mid-treatment due to a change in a provider’s network status or because a patient acts on inaccurate information within the health plan’s provider directory,
  • Ensure a patient’s continuity of care despite any network status changes for up to 90 days. Health plans must limit the cost-sharing amounts, including deductibles, to in-network terms of their contractual relationship with a provider were to end while a patient is receiving continuing care from that provider. At the same time, providers must continue to adhere to all policies and quality standards of their in-network agreement and accept the payment and cost-sharing amounts defined by those previously agreed-to terms.

Under these rules, providers/facilities must establish business processes that support accurate health plan provider directories. They must also refund patients, with interest as defined by HHS, if the patient was billed for and paid an amount in excess of their cost-sharing obligations.

At a minimum, providers/facilities are expected to maintain health plan directory accuracy by submitting information to payers at various times, including:

  • When a network agreement is executed.
  • When a network agreement is terminated.
  • When the content of the directory undergoes a material change, as defined in the Act.
  • Any other time at which the provider, facility, or HHS deems appropriate.

Meanwhile, health plans carry responsibilities under the rules including the need to:

  • Verify each provider/facility in the directory every 90 days.
  • Process changes within 2 business days of receiving an update.
  • Establish processes for removing unverified providers from the directory.
  • Respond to patient requests for network status information within one business day.


The cost of non-compliance

A provider/facility that fails to comply with these rules may face fines of up to $10,000 per violation. Additionally, the provider/facility risks removal from the health plan directory if the health plan is unable to verify information.

Health plans that fail to meet their responsibilities under these rules may face fines of up to $100 per day, per individual affected by a violation.

Both health plans and providers share the financial responsibility for an error if a patient relies on incorrect information from the health plan’s provider directory.


Provider/facility protections

Providers/Facilities are encouraged to protect themselves by adding provisions to their health plan contracts that place the burden on the health plan itself to remove the provider(s)/facility from the directory upon termination of the agreement and to bear any financial responsibility for providing inaccurate network status information to a subscriber.

While this may seem like yet another hurdle for providers to overcome, compliance with these rules is fairly easy to integrate into an organization’s existing operational structure. The RCM Solutions team at Lighthouse Lab Services can assist you in carving a path forward.

Contact us today for a free consultation.


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