"No Surprises Act" What’s The Impact?

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Often referred to as “The Act,” for short, lawmakers designed this law with the patients’ protection in mind, and it outlaws:

By Chris Ferguson

Do you know what you need to know about the No Surprises Act?

The No Surprises Act boasts patients’ protection against surprise medical billing, but what is surprise medical billing? What does the Act entail? If you are like many in your field, these questions are floating through your mind, so read on to get the scoop on the No Surprises Act. 

Table of Contents

What is the No Surprise Act?

The “No Surprises Act” is one piece of H.R. 133, Omnibus Appropriations, and Emergency Coronavirus Relief Act. Often referred to as “The Act,” for short, lawmakers designed this law with the patients’ protection in mind, and it outlaws:

  • Emergency service providers were sending surprise bills to patients.
  • Non-emergency service providers were sending surprise bills to patients.

In addition to the patient’s protection from surprise medical bills, otherwise known as balance billing, the No Surprise Bill law lays out how arbitrators will handle disputes between service providers and health care plan providers moving forward. 

Beginning on January 1, 2022, excluding ground ambulance transport, providers may no longer charge patients more than the cost-sharing due for in-network services. The Act applies to any situation in which out-of-network billing might surprise a patient. 

  • A surprise medical bill has two components
  • One of which is the difference between the patient’s health plan designated cost-sharing for services rendered by out-of-network providers and their designated cost-sharing for services rendered by in-network providers. For example, you might pay 10% for in-network services and 20% for out-of-network services.
  • Component two is the difference between the provider’s full charge and the allowed charges negotiated by insurance companies and providers. While much of the surprise medical bills are emergency services, there are also surprise medical bills related to non-emergency services.

Surprise medical bills impact a significant amount of emergency room visits.

Since emergencies often require a quick solution, patients are not likely to search for in-network physicians. Unfortunately, that means visiting an out-of-network facility is often unavoidable for patients in emergencies. 

According to USC-Brookings Schaeffer, when patients choose their primary physician and clinic for regular visits, they do not usually select their ancillary clinicians who might be a necessary addition to the team of physicians taking care of a patient. Then, the ancillary clinicians and emergency physicians receive a flow of out-of-network business from patients with little to no choice in the matter. 

Intentional or not, they found a loophole, providing a solution to any loss of business they might experience due to not being an in-network provider for the patients’ insurance plan. 

What the Act Means For Physicians

The No Surprise bill law prevents providers from surprise billing. Out-of-network providers must charge the patient the health plan’s in-network fee.

Implementing the No Surprise Bill law might cause some financial difficulties for some physicians if they are part of a smaller practice and do not have the necessary resources to use the IDR process to ensure they receive fair compensation. Adding this to the financial worries that resulted from the COVID-19 pandemic might make things a bit more difficult for some physicians. 

Lastly, Congressional Budget Office (CBO) believes there will be noticeable reductions in new in-network rates resulting from the 2021 Medicare physician payment schedule

How Does It Impact Physician Billing?

The No Surprise Bill law ensures that out-of-network facilities charge patients the in-network cost-sharing amounts designated by the patient’s health plan. However, the provider may dispute the cost-sharing amount through arbitration. 

How Does Surprise Billing Work?

Surprise billing happens when a patient receives a bill for services they received that includes out-of-network billing, opposed to the in-network cost-sharing the patient was expecting. 

The IDR is the arbitration method that providers can use to fight a surprise medical bill claim. The process includes each party submitting their proposed charge for the services rendered that resulted in the surprise medical bill. Then, the arbitrator chooses one of the proposed charges, and the party with the losing proposal must pay the arbitrator’s fee. 

Medical bill shock

Health Cost Transparency

Health plan payments for surprise out-of-network services are determined based on a minimum payment requirement for out-of-network facilities. In the case of the No Surprise Bill law, health plans must disburse an initial payment to the out-of-network facility or send them a notice of denial no more than 30 days after the date the facility provided the service.

Following arbitration, the amount upon which the arbitrator decided is made public. Some experts speculate the possibility that providers might choose to pursue arbitration to charge higher fees. 

On the other hand, the amount of time required from the start of the arbitration process to the time the arbitrator makes his decision might be a deterrent. Further, the waiting period between arbitration cases for similar services from the same provider could cause many providers to agree to the median in-network fee.

Scope of the Protections

The No Surprise Bill law applies to patients who carry any commercial insurance plan. Public programs, like Medicare Advantage, are excluded because they already protect their clients from surprise billing. However, patients with commercial insurance plans can receive services from any out-of-network provider other than ground ambulances at in-network prices. 

Under the No Surprise Bill law, patients will pay in-network fees for:

  • Hospital stays within the post-stabilization timeframe following an emergency. The No Surprise Bill law states the facility must provide care until the patient’s condition allows for a safe transfer to an in-network facility. 
  • All emergency facilities and professional services.
  • All air ambulance transportation- regardless of the emergency status.
  • Out-of-network care is ordered by an in-network facility. 
  • However, there is an exception to this part of the law. The notice and consent process of the No Surprise Bill law requires the out-of-network facility to notify the patient that they are designated out-of-network under the patient’s health plan over 72 hours before the scheduled service. 

 The “no exception group”:

  • Anesthesiology 
  • radiology
  • neonatology
  • Emergency medicine
  • pathology
  • Diagnostic testing 
  • Other services provided by hospitalists, intensivists, and assistant surgeons. 

 This group receives no exceptions under the No Surprise Bill law because patients do not typically choose these types of providers. 

Settling Payment Disputes

If a provider disagrees with the in-network fee the patient’s health plan designates for the type of services rendered, he can file for arbitration. The arbitration triggers a 30-day “open negotiation” process. Once the binding is initiated, if no agreement is reached, all parties involved can submit their final offers, and the arbitrator will decide which offer is the most reasonable. 

This arbitration process fills the hole created in the No Surprise Bill law where price support for air ambulance services and out-of-network emergency providers is non-existent. Since ambulance services and out-of-network emergency services cannot withhold care due to lack of ability to pay, the arbitration process is a necessary addition to the No Surprise Act. 

The takeaway is to prepare for the launch of the No Surprise Act by planning for the possibility of having a surprise medical billing incident. To simplify your billing, consider using an electronic Medical Billing Service

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