Patients have never been more concerned and affected by the cost of their healthcare treatment, as medical debt continues to rise and consumers demand transparency from their medical providers. In December 2020, President Trump signed the No Surprises Act, which established patients’ protections against surprise medical bills, building on parts of the Affordable Care Act (ACA) that include similar protection.
What is Surprise Billing?
Surprise billing happens when a patient unknowingly receives care from a provider that is outside the patient’s health plan network. This scenario can occur for both emergent and non-emergent services. For example, if a patient is having imaging performed at an in-network hospital, the radiologist could be out-of-network according to the member’s plan. If not prohibited by state law, the out-of-network provider can bill the patient for the difference between the billed charges and the amount paid by their insurance plan. This type of billing is known as “balance billing” and is prohibited by Medicare and Medicaid. The No Surprises Act will extend this similar protection to employer-sponsored and commercial health plans.
The key provisions of the No Surprises Act to be cognizant of for providers:
Balance billing is prohibited for out-of-network emergency care, provider services at in-network facilities, and air ambulance services. Starting in 2022, out-of-network hospitals and emergency facilities are prohibited from billing a patient more than they would pay for an in-network plan. Under this regulation, health plans must apply the member’s cost share for out-of-network care, cannot require a pre-authorization for out-of-network emergency services, and must process a claim within thirty days of receiving an out-of-network claim.
Determining cost shares calculation varies by state. The act requires a patient’s in-network co-insurance for out-of-network services to be paid at the “recognized amount,” the rate paid for a service under the state’s medical billing law or “all payer” rate model. If a state does not have these established, the service is paid at the “qualifying amount.” This amount is defined as the median of contracted rates for a specific service in the same geographic region within the same insurance market as of January 31, 2019. The rate will be adjusted per the Consumer Price Index for All Urban Consumers (CPI-U).
New arbitration and submission process. Administrators and providers will be required to learn and follow the new guidelines for out-of-network payments. These will be paid in one of three methods: 1.) The initial payment the plan reimburses for out-of-network services; 2) The negotiated rate from the insurance plan to be completed in 30 days; or 3) Through the new independent dispute resolution process.
Good faith estimates. Self-pay and uninsured individuals must be provided with a “good faith estimate” of expected charges for items and services that are rendered.
Notice and consent exception. The only exception to the balance billing exclusion rule is for certain non-emergency services which the provider gives written notice at least 72 hours in advance and obtains the patient’s written consent.
Continuity of care for patients. Continuing care patients will be required to be covered by a plan after being given a timely notice of any alteration in their participation. These services must be covered for the member for up to 90 days until a transition can occur.
Preparing for the No Surprises Act
1. Does your organization have a resource dedicated to negotiating out-of-network bills with a strong understanding of contract networks, a process for determining allowances for out-of-network services, and a rigorous appeal resolution process? Do you have a plan for creating contacts with out-of-network plans?
2. Does your organization have a team to create a process around the new dispute resolution process?
3. Are your customer service, patient access, and billing staff prepared for the regulation change in 2022?
a) Does the patient access team have a new process to track consent forms, create good faith estimates, and apply the appropriate cost-sharing percentages?
b) Does the billing staff have new procedures for not billing patients for out-of-network costs and how to handle these outstanding balances?
c) Can your customer service team address questions from patients that may arise from confusion about surprise billing or balance billing? Has the required regulation of disclosure around this law been prepared to provide to patients?
4. Current contracts for emergency and ancillary providers need to be reviewed to determine any areas of concern or exposure?
5. Has any financial analysis been completed to understand how this new law may impact reimbursement overall and current oversight planning?
6. Is your organization’s legal or risk management team familiar with state and federal laws around balance and surprise billing?
As more clarification is released around the No Surprises Act, one concept is apparent: current legislation is focusing on transparency for the patient. This new law may have a negative impact on a facility’s ability to obtain payments for services. Our experienced healthcare team can provide insights into the regulatory changes this law will require, aid in being complaint, and provide recommendations into processes to prevent this change from hindering collections.
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