No Surprises Act: 4 Key Takeaways on the Surprise Billing Rule
On July 1, 2021, the U.S. Departments of Health and Human Services, Treasury and Labor, and the Office of Personnel Management unveiled the first in a series of measures to protect healthcare consumers from surprise medical bills for emergency and scheduled care. The Interim Final Rule – Part 1 implements provisions of the bipartisan No Surprises Act, part of the Consolidated Appropriations Act enacted at the end of 2020 that establishes new protections from surprise billing and excessive cost-sharing.
Who is Affected by the No Surprises Act?
In essence, the rule safeguards consumers insured through employer-sponsored and commercial health plans from incurring out-of-pocket costs resulting from surprise medical bills. The act is intended to establish a fair structure by which providers and insurers can resolve payment disputes.
Effective January 1, 2022, payers and providers—including hospitals, freestanding emergency departments, critical access hospitals, individual practitioners and air ambulance services—would be prohibited from billing patients more than in-network cost-sharing amounts in certain circumstances. The prohibition applies to both emergency care and certain non-emergency situations where patients do not have the ability to choose an in-network provider. The provisions are subject to a 60-day comment period.
4 Key Takeaways on the No Surprises Act
1. Bans surprise billing for emergency services, regardless of where they are provided. Services must be billed on an in-network basis without requirements for prior authorizations.
2. Bans out-of-network cost-sharing for emergency and non-emergency services. Patients’ cost-sharing amounts, such as co-insurances or deductibles, cannot exceed in-network costs.
3. Bans out-of-network charges for ancillary care. The rule protects patients from surprise bills for situations in which services are received from out-of-network providers at in-network facilities, such as anesthesiologists, assistant surgeons or radiologists. The rule also applies protection when patients receive out-of-network air ambulance services. Ground ambulance services are excluded from the ruling at this time.
4. Requires advance notice for out-of-network charges. Providers and hospitals must give patients a plain-language consumer notice explaining that patient consent is required to receive care on an out-of-network basis before providers can bill at the higher out-of-network rate. For scheduled patient appointments, the providers or facilities must provide at least 72 hours’ notice of any implications for higher rates. In non-emergent situations, patients can consent to treatment from out-of-network providers and waive their balance-billing protections. This does not apply to ancillary services (i.e., anesthesia, pathology, neonatology), which are already restricted from balance billing under the ruling.
Non-emergency prior consent must include:
- Written or electronic notice of the providers’ out-of-network status
- A good faith estimate of the charges at least 72-hours prior to the service
- A statement that prior authorization or other limitations may be required
- A statement that consent is optional and that the participant may seek care from a participating in-network provider
- Providers are responsible for notifying the payer/plan that the services were furnished and provide a copy of the signed written notice and consent
How is the Patient Payment Amount Defined?
Under the No Surprises Act, a patient’s cost-sharing liability is determined by an all-payer model agreement, if applicable; or by state law, if applicable, or by qualifying payment amount, defined by 2019 median contracted rates for the service in the same geographic region within the same insurance market. If health plans and providers can’t agree on payment, the issue goes to arbitration, where factors, such as median in-network rate, previous contracts, complexity of services, training of the provider and more will be considered. Regulations regarding the independent dispute resolution process will be issued soon.
The Bottom Line on the Surprise Billing Rule
While many hospitals and health systems are still evaluating compliance strategies, fortunately, automated early detection, alerting, price estimation and authorization systems are available today. AccuReg has been auditing patient and insurance data and alerting registration staff of thousands of types of compliance and payment risks for 16 years.
No patient should be hit with a surprise—or balance—bill they were not expecting and did not consent to prior to treatment. Having the right systems in place to detect, alert and estimate accurately, automate authorizations and communicate to the provider and the patient (through digital patient engagement interfaces), will go a long way to enforcing the upcoming ban on surprise billing.