More than a third of employees in a recent survey said that the medical bills they receive after seeking care are “always or usually” a surprise to them. Yet, 28% say they pay them anyway because they don’t want to fight with the insurance company. What causes surprise medical billings? Insurance plans cover large portions of medical care, but deductibles or co-pays may come into play. Out-of-network providers may charge more for a service than the insurance company is willing to pay. Provider pricing details given at the time of service may have been incomplete. These are just a few of the more common reasons why a patient receives a bill after the fact that’s quite a shock.
To help remedy the problem, the Consolidated Appropriations Act of 2021 (CAA) was enacted in December 2020. Among other provisions, the CAA includes the ‘No Surprises Act,’ which will help protect consumers from unexpected medical bills beginning January 1, 2022.
No Surprises Act: Part I
Because so many people experience unexpected billings, the No Surprises Act (CAA Title I) provides patient protection in the form of bans on specific provider activities. According to the National Law Review, these include:
- Ban on high out-of-network cost-sharing for emergency services. A group health plan must treat emergency services provided by out-of-network providers or facilities as in-network for purposes of applying cost-sharing requirements. Out-of-network providers and facilities are prohibited from billing a participant for amounts more than the participant’s in-network cost-sharing responsibility, and this prohibition generally cannot be waived by a participant. However, such providers and facilities may balance-bill participants for post-stabilization services if they provide notice to the participant and obtain his or her consent to be balance-billed before providing the services.
- Ban on out-of-network charges for ancillary care at an in-network hospital or ambulatory surgery center. If a hospital or ambulatory surgery center is in-network, the group health plan must treat anesthesia, pathology, radiology, laboratory, neonatology, assistant surgeon, hospitalist, and intensivist services as in-network when applying cost-sharing requirements. Such providers are prohibited from billing a participant for amounts more than the participant’s in-network cost-sharing responsibility, and this prohibition cannot be waived by a participant.
- Ban on other out-of-network charges without advance notice. If a hospital or ambulatory surgery center is in-network and services other than those described above are provided, the group health plan must still treat the services as in-network when applying cost-sharing requirements. However, the out-of-network providers may balance-bill the participant for the services if they provide advance notice to the participant and obtain his or her consent to be balance billed providing the services.
For more information, refer to the Centers for Medicare and Medicaid Services (CMS) fact sheet about this portion of the No Surprises Act.
No Surprises Act: Part II
The second part of the No Surprises Act (CAA Title II) also goes into effect on January 1, 2022, and deals with pricing transparency and payment disputes. Provisions include:
- Good faith estimates. Healthcare providers and facilities must provide a good-faith estimate of expected charges to uninsured consumers and to insured consumers if they don’t plan to have their health plan help cover the costs (self-paying individuals). The good-faith estimate must be provided either after the patient has scheduled an item or service, or upon their request. It should include expected charges for the primary item or service being provided as well as any other items or services being provided as part of the same scheduled experience.
- Patient-provider dispute resolution. In the event an uninsured (or self-pay insured) individual receives a good faith estimate but is billed for an amount substantially above good-faith estimate, patients will have access to a patient-provider dispute resolution process to determine the amount. The Part II Rule defines “substantially above” as at least $400 more than the total listed on the good faith estimate. Parties must initiate the dispute resolution process within 120 calendar days of the patient receiving the bill. Once the process is initiated, HHS will appoint a selected dispute resolution entity (SDRE), certified under the No Surprises Act, to make a payment determination within 30 business days after information is received.
- External review. The Part II Rule generally expands the scope of claims eligible for external review under the Affordable Care Act to include adverse benefit determinations by benefit plans and health insurance issuers related to compliance with the No Surprises Act. The Part II Rule provides examples of the types of adverse benefit determinations which are newly eligible for external review. In addition, the Part II Rule requires grandfathered health plans that generally are exempt from requirements related to external review, nonetheless to provide for external review of adverse benefit determinations for claims subject to No Surprises Act protection. The Part II Rule specifies that patients in grandfathered plans shall be permitted to access external review after exhausting applicable appeal rights under state law or under the terms of the patient’s health benefit plan.
For more information on this portion of the No Surprises Act, refer to this Centers for Medicare and Medicaid Services (CMS) fact sheet.
For patients who don’t have sufficient resources, paying surprise out-of-pocket expenses can be financially devastating. Both parts of the No Surprises Act aim to alleviate the element of surprise and help patients to be better prepared for costs billed after a service or treatment is rendered.
Talk to your benefits administrator about Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs). Both of these can be used to pay for a wide variety of medical expenses not covered by insurance while helping you save on taxes at the same time.
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