The No Surprises Act was signed into law on December 27, 2020, as part of the Consolidated Appropriations Act of 2021 (H.R. 133; Division BB – Private Health Insurance and Public Health Provisions). The law addresses surprise medical billing at the federal level, with most sections of the legislation taking effect by January 1, 2022. The Departments of Health and Human Services, Labor, and Treasury intend to issue guidance in the near future regarding their expectations related to good-faith compliance with the provisions in the Act, but what are these provisions, and what do they mean for healthcare professionals?
Currently, patients can be billed for the difference between the amount charged by the provider or hospital and the amount paid by insurance—which can be nothing or amount to hundreds if not thousands of dollars—through a practice called balance billing. While Medicare and Medicaid both prohibit balance billing practices, commercial or employer-sponsored plans do not. The new rule will extend similar protections to Americans insured through employer-sponsored and commercial health plans and includes the following provisions:
- Ban on surprise billing for emergency services, regardless of where they are provided, with all services treated as in-network and without a need for prior authorization.
- Elimination of high out-of-network cost-sharing for emergency and non-emergency services, with co-insurance, deductibles, and other patient cost-sharing not to exceed the rates that would be billed by an in-network physician.
- Ban on out-of-network charges for ancillary care provided at any in-network facility.
- Inability to bill out-of-network charges without advance notice. Subsequently, healthcare providers and facilities will have to provide patients with a plain-language consumer notice explaining that patient consent is required to receive care on an out-of-network basis before the patient can be billed at the higher out-of-network rate.
Two main categories of providers will need to comply with the new rules: freestanding emergency departments (EDs) and in-network hospitals with ED and other physicians who are not themselves in-network for a respective health plan. To comply with the No Surprises Act, revenue cycle teams will need to reconsider traditional billing processes. Under the new rule, the burden shifts to the payer and provider for negotiating payments before the patient even sees the bill. As such, the provider will now be required to bill the health payer first to see if services are covered under a patient’s particular health plan.
It has been suggested that technology-enabled revenue cycle solutions can help facilities and providers meet the No Surprises Act by enabling individualized cost estimates to be generated for patients at the time of scheduling. Although many facilities already have online cost estimator tools in place to comply with select portions of CMS’s existing Price Transparency requirements, providers still need to ensure their existing technology can identify and flag patients who are out-of-network and provide these patients with accurate cost estimates. Doing so will not only aid in compliance, but also help patients make better healthcare decisions and reduce the likelihood that they will receive unexpected medical bills that they will be unable to pay.