Background of No Surprises Act
The No Surprises Act was signed into law by President Trump on December 27, 2020. This new law aims to protect consumers from surprise medical bills. The law has several key features; Patient Cost-Sharing Protections, Settling Payment Disputes, Arbitration, and Price Transparency.
Patient and consumer advocates have been trying to enact nationwide protections against surprise medical bills for years. There are plenty of horror stories of patients receiving hundreds of thousands of dollars in surprise bills for emergency care. It’s estimated that 1 in 5 emergency visits and 1 in 6 inpatient visits will result in a surprise bill. The economic insecurity posed by the ongoing coronavirus pandemic added a sense of urgency to passing these new regulations.
States have recognized these billing practices as problematic. Seventeen states currently have comprehensive surprise billing laws. Fifteen states have some protections against surprise billing including Massachusetts and New Hampshire. State laws can only go so far. The No Surprises Act provides protection to over 135 million Americans with self-funded coverage and to federally regulated providers like air ambulances. It also shifts the cost-sharing burden from patients to providers. The law was passed as part of the omnibus spending bill that was part of the latest Covid-19 relief.
This post will focus on what the No Surprises Act does and how it will impact providers who must adjust to these new rules and regulations.
Patient Cost-Sharing Protections
The new law limits how much patients can be billed for both emergency and non-emergency out-of-network services. Patients are now held harmless from surprise bills resulting from emergency care. Under the law, the patient can only be billed based on their in-network rate. The amount of patient responsibility will be counted toward their annual deductible. The law also protects patients who are treated by out-of-network providers at in-network medical facilities.
For example, if an insured patient with a $4000 deductible receives out-of-network emergency care that costs $40,000, they will only pay their in-network deductible. The other $36,000 will be negotiated between providers and the insurance company. There are a few exceptions like when a patient knowingly seeks elective treatment out-of-network. Otherwise, patient liability remains at the in-network rate.
Price transparency is also an integral part of the new law. This is especially relevant to providers as it has the potential to complicate and prolong the medical billing process. Patients must be made aware of their cost-sharing liability prior to receiving care. They can receive an Advanced Explanation of Benefit, which must provide a good faith estimate of the cost of services and patient responsibility. Additionally, the provider must identify services that are in-network. For out-of-network items, they must provide the patient with resources to find an in-network provider.
Settling Payment Disputes & Arbitration
The new law establishes an independent dispute resolution (IDR) process. Out-of-network providers can dispute payments made by a health plan for services subject to surprise billing protections. If a provider and a payer cannot resolve their payment dispute within 30 days, a federally-approved neutral arbiter will manage negotiations. Each party must submit an offer for consideration to the arbiter. The arbitration process must conclude within 30 days and the losing entity will cover all fees associated with the IDR process.
In anticipation of this, practices should be sure that they have relevant information available for consideration by the arbiter. This includes their median contracted in-network rate, the provider’s training, and experience, the complexity of the care the patient received, the scope of services provided, and demonstrated good faith effort in resolving the payment dispute. It should be noted that the arbiter cannot consider the provider’s typical billed charges or the rates they receive from federal programs such as CMS. HHS is still in the process of establishing clear regulations and guidelines for the arbitration process.
Health Plan Benefits and Price Transparency
The No Surprises Act contains provisions that improve the transparency of health plan benefits, plan price transparency, and provider price transparency. Beginning on January 1, 2022, all health plans must provide their customers with an Advanced Explanation of Benefits (AEOB) either before the patient schedules their care or by patient request. The AEOB must be a good faith estimate of the scheduled services the patient will receive.
In addition, the AEOB must contain the following information: network status of the provider, information on prior authorizations, applicable rate estimates, patient out-of-pocket costs, the health plan’s anticipated expenses, and the amount the patient has already paid toward their annual out-of-pocket maximum. The AEOB must be sent to the patient within 3 days of them scheduling a service that will occur at least 10 business days later or sent to the patient within 1 day if the scheduled service will occur less than 10 business days later. HHS may allow certain exemptions for specific services, although that has not been clearly established yet.
How PRL Can Help You
The No Surprises Act is going to change the way health plans, providers, and patients engage with one another. Some provisions will need clarification from HHS and other federal agencies. However, it’s clear that providers must be ready to provide relevant information on health plan benefits and service price transparency to patients on relatively short notice. Ensuring that your records including, patient medical records, pricing and service records, and scope of services are organized and up-to-date by the new year should be a top priority. Fortunately, our team of researchers, RCM experts, and account managers can help you navigate this new law. PRL has a variety of solutions that can help your practice organize data better, maintain patient records, and assist in other important areas such as coding and compliance. The No Surprises Act will likely usher in an era of increased regulation and scrutiny of pricing and billing practices. It is best to be fully prepared for these changes as it is likely that more regulatory legislation will be implemented in the future.