Virginia IDR Arbitration For Medical Revenue Recovery

Virginia Surprise Billing Law (SBL)

The Virginia Surprise Billing Law (SBL) became effective on January 1, 2021, and is codified under Sections 38.2-3445.01 through 38.2-3445.07 and 14 VAC 5-405-10 et seq. This law establishes protections against surprise medical bills and sets guidelines for resolving disputes between healthcare providers and insurers regarding out-of-network (OON) reimbursement.

Key Provisions of the Virginia SBL

1. Reimbursement Standards:
   • Reimbursement must be at “commercially reasonable amounts”, effectively tied to Usual, Customary, and Reasonable (UCR) rates.
2. Negotiation and Arbitration Timeline:
   • Providers and insurers have a 30-day negotiation period beginning at the date of initial payment.
   • If no resolution is reached, either party may initiate arbitration within 10 days after the expiration of the 30-day negotiation period.

Scope of Application

The Virginia SBL applies to fully insured managed care plans issued or delivered in Virginia, including grandfathered plans, for:

• Emergency services provided to enrollees.
• Nonemergency services provided by out-of-network providers at in-network facilities, involving surgical or ancillary services.

State and Federal Coordination

1. Specified State Laws:
   • Virginia's specified state laws govern OON rate determinations for emergency and nonemergency services within the scope of the Virginia SBL.
2. Federal Independent Dispute Resolution (IDR) Process:
   • The federal IDR process applies in cases where the Virginia SBL does not govern, including:
     • Items and services furnished to individuals in an insured group health plan or group/individual health insurance coverage by nonparticipating providers and emergency facilities not covered by the Virginia SBL.
     • Air ambulance services provided by nonparticipating providers.
3. CMS Enforcement:
   • CMS oversees and enforces the outcomes of the federal IDR process for applicable cases in Virginia.

CMS Clarifications

In a letter from CMS to the Governor of Virginia (December 21, 2021), CMS confirmed:

• Virginia does not have an All-Payer Model Agreement to determine OON rates.
• The Virginia SBL applies to specific emergency and nonemergency services for individuals covered by fully insured managed care plans.
• The federal IDR process under Section 2799A-1(c) of the Public Health Service (PHS) Act and 45 CFR 149.510 applies to items and services excluded from Virginia’s specified laws.
• For air ambulance services, the federal IDR process under Section 2799A-2(b) of the PHS Act and 45 CFR 149.520 governs reimbursement disputes.

Conclusion

The Virginia SBL provides a clear framework for resolving surprise billing disputes and determining reimbursement for OON services while aligning with federal IDR processes for cases beyond the state law’s scope. This ensures comprehensive protections for patients and accountability for healthcare providers and insurers in Virginia.