Author: Shelly Hodges-Konys, CBC, Director of Compliance
Surprises can be wonderful when it comes to birthdays, anniversaries, gender reveal parties and the like. But, surprises are extremely unwelcome when you need urgent medical attention and later learn (through receipt of an unexpected invoice for medical services – a practice known as balance billing) that the radiologist who read the x-ray in your local hospital emergency room is out-of-network with the insurer. Current practice in these situations is for providers to send a balance bill for the difference between the billed charges by the out-of-network provider and the amount paid by the insurer or plan. The No Surprises Act passed at the end of 2020 was enacted to put a stop to these “surprise” medical bills that commonly happen when medical care is provided in emergency situations at out-of-network facilities or when care is provided by physicians or other providers who are out-of-network at an in-network facility.
Earlier this month, the Departments of Health and Human Services, Labor, and Treasury released the first round of guidance in response to the No Surprises Act providing plan participants protections from such practices. The new rules apply to group health plans, insurers, physicians, and other healthcare providers including air ambulance services beginning January 1, 2022. The effective date will apply specifically to group health plans on the first plan year or renewal date on or after January 1, 2022.
This initial round of guidance addresses the initial bill or payment of covered services and future guidance is intended to address the dispute process between providers and plans or insurers. As such, the protections in the interim final rule include coverage requirements, limitations on cost-sharing, prohibitions on balance billing, appeals processes, and disclosure requirements. The protections apply in three settings: emergency services, charges by out-of-network providers at in-network facilities, and air ambulance services. There is a lot of information contained in the guidance, but the main provisions:
- Require provision of emergency services without prior authorization and without limitation on what constitutes an emergency solely on the basis of diagnosis code whether in-network or out-of-network,
- Require coverage for non-emergency services by non-participating providers at participating facilities as if the services were provided in-network,
- Limit cost-sharing for out-of-network services subject to these protections to no higher than in-network levels,
- Require such cost-sharing to count toward any in-network deductibles and out-of-pocket maximums,
- Generally, prohibit balance billing, and
- Provide an Independent Dispute Resolution Process (IDR) to settle claims between plans and providers and appeals procedures for participants.
While there is a general prohibition on balance billing for emergency services, an exception to this rule applies to non-emergency care provided by out-of-network providers at in-network facilities. For the exception to apply, patients must be provided 72-hour advance notice and provide their consent to use of an out-of-network provider. While the plan must still calculate the cost-sharing for the services as if they were provided in-network, the patient may be balance billed if they have been provided advance notice and given their consent.
Action Items for Employers
Responsibility for complying with the protections in the No Surprises Act rests with the insurer if a plan is fully insured and with the plan sponsor if a plan is self-funded. Final guidance is expected before the end of the year, but the interim guidance gives employers enough information to begin planning. Following are a few of the expected impacts on employer-sponsored plans:
- Plan document language should be reviewed and updated to ensure that it does not violate the No Surprises Act (for example, provisions that define emergency use of the emergency room or require a sudden onset of symptoms are not allowed)
- Insurers/claims administrators will need to adjust their claims adjudication practices to comply with the new regulation on behalf of employers
- Explanations of Benefits (EOBs) for services covered under the No Surprises Act will need to be updated to inform participants of their rights under the No Surprises Act
HORAN is working to understand each individual vendor’s response to the No Surprises Act and to provide clients with potential plan cost impacts (if any).
Please consult your HORAN representative with questions.
The information contained in this document is informational only and is not intended as, nor should it be construed as, legal or accounting advice. Neither HORAN nor its consultants provide legal, tax nor accounting advice of any kind. We make no legal representation, nor do we take legal responsibility of any kind regarding regulatory compliance. Please consult your counsel for a definitive interpretation of current statute and regulation and their impact on you and your organization.
