Surprise Medical Billing

Caroline Billings
Release Date- January 24, 2022
Review Date- April 4, 2022

The No Surprises Act was signed into law on December 27, 2020, as a portion of the Consolidated Appropriations Act of 2021 (H.R. 133; Division B.B.—Private Health Insurance and Public Health Provisions)- Detailed Summary of No Surprises Act | AHA. This act will confront the issue of surprise medical billing at a national level. In addition, many sections of the Surprise Billing legislation went into effect on January 1, 2022. The Departments of HHS, Labor, and Treasury are assigned to guide regulatory requirements for enacting the legislation (AHA-Detailed Summary of No Surprises Act).

No Surprises Act- Contents

Most health insurers carry provider and healthcare facility networks that agree to accept a certain amount of money for their care. Out-of-network providers generally charge patients much more money than in-network providers/facilities that contract with insurers. To combat this, “balanced billing” was implemented in some states, where out-of-network providers might charge patients the difference between the bill and the amount their insurance would pay. This type of billing is prevalent in air ambulance services, where individuals do not have much control over who gives them care. The No Surprises Act was introduced in Congress as a way to significantly lower the cost of surprise bills for patients, especially since out-of-network surprise bills do not count toward a patient’s deductible.

Among other provisions, the No Surprises Act:

• prevents patients from acquiring surprise medical bills that result from a lack of total insurance coverage for out-of-network physicians who work for in-network facilities, emergency services, and air ambulance coverage
• Only requires payment from patients for their in-network cost-sharing amount. From here, care providers and insurance companies negotiate reimbursement.
• Provides providers and insurance companies an independent dispute-resolution system in case reimbursement solution disputes arise. The No Surprises Act does not set any benchmark amounts for insurers to reimburse providers.
• necessitates that care providers and health plans help patients access healthcare cost information

Requirements Related to the No Surprises Act

The Departments of Health and Human Services, Labor, and Treasury, and the Office of Personnel Management (OPM) collectively released interim final rules with comment periods (IFC) on July 1 and September 30, 2021, regarding new protections from surprise medical billing and excessive sharing of cost information for patients receiving healthcare. More information regarding determining out-of-network rates and giving patients notice of these IFCs can be found here.

The July 2021 Ruling

• The interim final rule from the Departments and Office of Personnel Management (OPM) restates protections afforded to patients regarding surprise billing for emergency services, air ambulance services given by out-of-network providers, and in some cases, non-emergency care provided by out-of-network care providers at in-network healthcare facilities. In addition, if a patient’s healthcare plan offers any emergency service benefits, this IFC requires that emergency services be covered without prior authorization/approval, regardless of the provider’s network status or any other condition of the plan/coverage (other than exclusion or coordination of benefits—or a permitted waiting period or affiliation). Emergency services are defined as specific services provided in the emergency room of a hospital facility or independent emergency department. This statute includes some post-stabilization services depending on the circumstances.
• The IFC also regulates cost-sharing for any out-of-network services (services subject to the protections of this IFC) to no higher than in-network cost-sharing levels. This regulation allows the money to count toward a patient’s in-network deductibles and prevents balanced billing.
  • The consumer cost-sharing amounts for these emergency services (out-of-network) must be calculated in one of the following ways (Reference- Requirements Related to Surprise Billing; Part I Interim)
    • “An amount determined by an applicable All-Payer Model Agreement under section 1115A of the Social Security Act.
    • If there is no such applicable All-Payer Model Agreement, an amount is determined under a specified state law.
    • If neither of the above applies, the lesser amount of either the billed charge or the qualifying payment amount, which is generally the plan’s or issuer’s median contracted rate.”
• The Department of Health and Human Services’ response to the release of Part 1 (released in July)

The September 2021 Ruling

• Outlines the “federal dispute resolution process, good faith estimate requirements for the uninsured or those who use self-pay, requirements for patient-provider disputes when the patient is uninsured or uses self-pay, and some external review provisions of the No Surprises Act.
• The regulations regarding independent dispute resolutions, good faith estimates for uninsured individuals, patient-provider dispute resolutions, and the external review provisions of the No Surprises Act can be found here.

January 2022 Updates

• HHS Kicks Off New Year with New Protections from Surprise Medical Bills | CMS

Other Resources

• American Medical Association: Federal Action on Surprise Medical Bills- What Doctors Should Know