The No Surprises Act is the balance billing or surprise billing relief portion of the Consolidated Appropriations Act, 2021 (CAA). All of the No Surprises Act provisions take effect on January 1, 2022. Congress tasked certain federal agencies with engaging in extensive rulemaking proceedings during 2021. On July 1, 2021, The Departments of Health and Human Services (HHS), Labor (DOL), Treasury, and the Office of Personnel Management (collectively known as “the Departments”) issued Requirements Related to Surprise Billing; Part I. The HHS announcement describes the Requirements Related to Surprise Billing as an interim final rule restricting surprise billing and balance billing per the requirements of the No Surprises Act. The Department of Labor’s Employee Benefits Security Administration (EBSA) also posted the Rights and Protections Against Surprise Medical Bills model notice on July 1, 2021.
Surprise billing or balance bills can occur when a patient receives treatment or services from a non-network provider.
Balance billing describes how an out-of-network provider can charge an insured patient the full difference – the balance – between what the participant’s insurer pays and what the provider wants to charge for a covered service. Balance bills frequently occur when a plan participant unknowingly receives treatment or services from a non-network provider at an in-network facility. For example, an insured patient goes to an in-network doctor for surgery at an in-network hospital. However, the facility contracts with an out-of-network specialist (i.e., radiologist, anesthesiologist, or pathologist) to perform certain services related to the surgery. Such a circumstance causes that patient, who planned to incur only in-network charges, to incur a balance bill for the difference between what their insurer pays out of network for the specialist’s service and the specialist’s non-network charges for the service. The non-network physician’s services can be billed to the insured patient directly for the difference.
Balance billing can also happen when patients receive emergency care services.
If an out-of-network physician treats a patient in an emergency, in an out-of-network hospital, or if a person remains in an out-of-network hospital after being stabilized, the patient can owe a balance bill for the out-of-network costs. Patients can also receive a balance bill from out-of-network emergency transportation services such as air ambulances.
When the No Surprises Act provision of the CAA becomes effective in 2022, plan participants will not get balance or surprise bills in certain circumstances.
An out-of-network provider cannot send a balance bill to a plan participant when the plan participant is: (1) seeking emergency care, (2) transported by an air ambulance, or (3) receiving non-emergency care at an in-network hospital but is unknowingly being treated by an out-of-network physician or laboratory. In the covered circumstances, covered individuals will only be responsible for the cost-sharing – deductibles, coinsurance, and copayment – that they pay according to their plan’s in-network terms.
The No Surprises Act requires group health plans and health insurance issuers to provide notice of the surprise billing laws requirements.
The DOL issued a Model Notice that meets the notice requirements under the Internal Revenue Code (IRC), the Employee Retirement Income Security Act (ERISA) and the Public Health Service Act (PHSA). A group health plan or health insurance issuer that offers group or individual health insurance coverage must make the notice available or post it on a public website of the plan or issuer. The notice describes the rights and protections against surprise medical bills available to plan participants.
The new interim rule implements certain provisions of the No Surprises Act.
The Requirements Related to Surprise Billing; Part I amends and adds provisions to the existing rules under the IRC, ERISA, PHSA and the Federal Employees Health Benefits Act (FEHBA). The new rule does not allow surprise billing for items and services covered under the No Surprises Act. The rule prohibits surprise medical bills for (1) emergency services, (2) air ambulance services provided by out-of-network providers and (3) non-emergency services provided by out-of-network providers at in-network facilities in certain circumstances. If a plan provides or covers any benefits for emergency services, the Requirements Related to Surprise Billing rule requires emergency services to be covered:
- Without any prior authorization (i.e., approval beforehand).
- Regardless of whether the provider is an in-network provider or an in-network emergency facility.
- Regardless of any other term or condition of the plan or coverage other than the exclusion or coordination of benefits, or a permitted affiliation or waiting period.
The rule defines emergency services to include specified services administered in an emergency department of a hospital or an independent freestanding emergency department. The rule details instances in which it considers post-stabilization services to be emergency services.
The rule also limits cost-sharing for out-of-network services subject to the rule’s no-surprise-billing protections.
The HHS announcement explaining the provisions of the interim final rule details how cost-sharing and additional charges work in light of the new rule. According to the HHS announcement, the interim final rule bans:
- Surprise billing for emergency services. Regardless of where provided, emergency services must be treated on an in-network basis without requirements for prior authorization.
- High out-of-network cost-sharing for emergency and non-emergency services. A plan participant’s cost-sharing, such as coinsurance or a deductible, cannot be higher than if an in-network provider provided such services. Any coinsurance or deductible must be based on in-network provider rates.
- Out-of-network charges for ancillary care (like a radiologist, anesthesiologist, pathologist or assistant surgeon) at an in-network facility rate in all circumstances.
- Other out-of-network charges without advance notice. Healthcare providers and facilities must provide patients with a plain-language consumer notice explaining that patient consent is required to receive care on an out-of-network basis before that provider can bill at the higher out-of-network rate.
The total amount paid to the out-of-network provider, which includes the insurer’s payment and the enrollees’ cost-share, must be based on:
- 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 determined by a specified state law.
- If there is no such applicable All-Payer Model Agreement or specified state law, an amount agreed upon by the plan or issuer and the provider or facility.
- If none of the three conditions above apply, an amount determined by an independent dispute resolution (IDR) entity.
The Departments plan to describe the acceptable IDR entities in the next implementing rule of the No Surprises Act.
The Centers for Medicare & Medicaid Services (CMS) issued two news releases providing information about the new interim final rule.
The first release is a Fact Sheet for employers and insurers providing information about the rule. The other is a Fact Sheet for patients and healthcare consumers entitled What You Need to Know about the Biden-Harris Administration’s Actions to Prevent Surprise Billing. The Requirements Related to Surprise Billing were published on the Federal Register on July 13, 2021, and it will be available online at federalregister.gov/d/2021-14379. In addition, public comments on the rule can be submitted by mail or on the comment page at regulations.gov. To ensure your comment will be considered, it must be received at one of the acceptable commenting addresses or online by 5 p.m. ET on September 7, 2021.
EPIC offers this material for general information only. EPIC does not intend this material to be, nor may any person receiving this information construe or rely on this material as, tax or legal advice. The matters addressed in this document and any related discussions or correspondence should be reviewed and discussed with legal counsel prior to acting or relying on these materials.
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Compliance Manager – Atlanta, GA