The “No Surprises Act” – Protecting Consumers from Surprise Medical Bills

This new law is set to take effect on Jan. 1, 2022.

 In the closing days of 2020, Congress enacted and the President signed into law the “No Surprises Act.”  But what does that mean for providers and patients exactly?

The Act contains key protections to hold consumers harmless from the cost of unanticipated out-of-network medical bills. So-called “surprise” bills typically arise in emergencies – when patients have little or no say in where they receive care. They also arise in non-emergencies, when patients at in-network hospitals or other facilities receive care from ancillary providers (such as anesthesiologists) who are not in-network and the patient did not choose.

This new law is set to take effect on Jan. 1, 2022, so time is of the essence to work on a compliance strategy, should your provider and/or practice be called to see a patient who is out-of-network or uninsured.

The measure was included in omnibus legislation funding the federal government for the 2021 fiscal year and providing stimulus relief funding to counteract the financial impact of the COVID-19 pandemic. When the new law takes effect for health plan years beginning on or after Jan. 1, 2022, it will apply to nearly all private health plans offered by employers (including grandfathered group health plans and the Federal Employees Health Benefits Program), as well as non-group health insurance policies offered through and outside of the marketplace.

One of the more important provisions of the Act is a requirement for health plans to keep network provider directories up to date.

Patients who see an out-of-network provider will not be responsible for cost-sharing, other than what they would have paid to an in-network provider. Equally important, providers will be barred from holding patients liable for higher amounts.

A health plan that generally doesn’t cover out-of-network care, such as an HMO, might deny a surprise bill entirely. Or plans might pay a portion of the bill but leave the patient liable for balance billing – the difference between the undiscounted fee charged by the out-of-network provider and the amount reimbursed by the private health plan. Balance billing on surprise medical bills has been known to reach into the hundreds or even thousands of dollars for patients. Luckily, surprise medical bills are not a problem today under public programs, such as Medicare and Medicaid plans, as they prohibit balance billing.

The No Surprises Act also tries to increase transparency for all patients to better understand their cost-sharing liability ahead of time, before a healthcare service is delivered. The medical facility/provider must provide a good-faith estimate of costs and cost-sharing; it also must identify whether the provider(s) furnishing the items or services is in-network – and if not, how to find in-network providers.

Emergency Services
Patients will be protected from surprise medical bills for emergency services from the point of evaluation and treatment until they are stabilized and can consent to being transferred to an in-network facility. Protections will apply whether the emergency services are received at an out-of-network facility (including any facility fees) or provided by an out-of-network emergency physician or other providers.

The No Surprises Act will also extend to air ambulances, which have a history of sending inflated surprise medical bills to patients with critical medical situations. To increase transparency regarding air ambulances, the No Surprises Act will require air ambulance providers and insurers to submit two years of cost and claims data to federal officials for publication in a comprehensive report. The legislation does not extend to ground ambulances.

Nonemergency Services
As of Jan. 1, 2022, patients will be protected from surprise medical bills for non-emergency services provided at an in-network facility, but by an out-of-network provider.

Why has this been an issue in the past? An example would be a patient receiving a surprise bill from a non-emergency out-of-network provider that provides ancillary services (such as those delivered by a radiologist, anesthesiologist, or pathologist) or specialty services needed to respond to unexpected complications (such as those delivered by a neonatologist, cardiologist, or general surgeon).

Here, the No Surprises Act allows for some voluntary exceptions to surprise medical bill protections, but only if a patient knowingly and voluntarily agrees to use an out-of-network provider. For instance, if a patient wants to select an out-of-network orthopedist for a knee replacement or an out-of-network obstetrician for scheduled delivery, the patient could waive the federal protections (and thus could be charged a balance bill). Because the patient is knowingly choosing to see an out-of-network provider, the reasoning goes, the additional cost is no longer a “surprise” to the patient. This is where providers will also need to protect themselves: being called in the middle of the night to an emergency to see and treat a patient, with no knowledge of the patient’s insurer. If the patient is not coherent enough to make decisions on the in- or out-of-network provider choice, it may default to who is available – and the provider and facility will have no choice but to accept an in-network rate.

The legislation also allows certain providers to request that a patient sign a consent waiver. This exception is only allowed in nonemergency situations. And providers may not request a consent waiver if a) there is no in-network provider available in the facility; b) the care is for unforeseen or urgent services; or c) the provider is an ancillary provider that a patient typically does not select (e.g., the patient is receiving a screening colonoscopy and is in-network for an elective case, but the anesthesiologist and pathologist are out-of-network and the patient did not have a choice in their selection).

Enforcement
With respect to insurers and employers, the No Surprises Act adopts the same enforcement framework as the Patient Protection and Affordable Care Act (PPACA) and Health Insurance Portability and Accountability Act (HIPAA): states will continue to be the primary regulators of fully insured health insurance products (with backup enforcement by the federal government if a state fails to substantially enforce the law).

PROGRAMMING NOTE: For more details on the No Surprises Act and how payment disputes will be settled, listen to Terry Fletcher report this story live today during Talk Ten Tuesdays, 10 a.m. Eastern.