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Surprise! It’s the No Surprises Act

December 21, 2021

Starting January 1, 2022, consumers will have new billing protections from receiving surprise medical bills for emergency services (including air ambulances) and non-emergency services provided at an in-network facility.

Patients’ out-of-pocket costs will be limited to the costs they would have paid if they had received services from an in-network doctor, hospital, or other health care provider.

Background – Surprise Billing and the Need for Greater Protections

Providers and facilities that are not part of a plan or issuer network (out-of-network or “OON” providers) usually charge higher amounts than the contracted rates the plans or issuers pay to in-network providers.

In many cases, the OON provider may bill the individual for the difference between the charge and the amount paid by their plan or insurance, unless prohibited by state law. This is known as “balance billing. A “balance bill” may come as a surprise for many people. A surprise bill is an unexpected bill from a health care provider or facility.

The No Surprise Act (NSA) will protect consumers from surprise medical bills by:

  • requiring private health plans to cover these out-of-network claims and apply in-network cost sharing. The law applies to both job-based and non-group plans, including grandfathered plans
  • prohibiting doctors, hospitals, and other covered providers from billing patients more than in-network cost sharing amount for surprise medical bills.

Emergency Services  – Surprise billing protections apply to most emergency services, including those provided in hospital emergency rooms, freestanding emergency departments, and urgent care centers that are licensed to provide emergency care. Without any prior authorization (i.e., approval beforehand).

Non-emergency services provided at in-network facilities – The NSA covers non-emergency services

provided by out-of-network providers at in-network hospitals and other facilities. Often, the doctors who work in hospitals don’t work for the hospital; instead, they bill independently and do not necessarily participate in the same health plan networks. 

Doctors and hospitals must not bill patients more than the in-network cost sharing amount for surprise bills

For services covered by the NSA, providers are prohibited from billing patients more than the applicable in-network cost sharing amount; a penalty of up to $10,000 for each violation can apply.

How will consumers know if a bill or claim constitutes a surprise medical bill? – It is up to both providers and health plans to identify bills that are protected under the NSA. Providers and facilities must post a one-page disclosure notice summarizing NSA surprise billing protections on a public website and give this disclosure to each patient for whom they provide NSA-covered services.

Some providers can ask consumers to waive rights

An exception to federal surprise billing protections is allowed if patients give prior written consent to waive their rights under the NSA and be billed more by out-of-network providers. 

Notice and Consent Waiver Not Permitted for:

  • Emergency services
  • Unforeseen urgent medical needs arising when non-emergent care is furnished
  • Ancillary services, including items and services related to emergency medicine, anesthesiology, pathology, radiology, and neonatology
  • Items and services provided by assistant surgeons, hospitalists, and intensivists
  • Diagnostic services including radiology and lab services
  • terms and services provided by an out-of-network provider if there is not another in-network provider who can provide that service in that facility

Good Faith Estimates for Uninsured (or Self-pay) – Requirements for Providers & Facilities

When scheduling an item or service, providers and facilities are required to inquire about the individual’s health insurance status. The provider or facility must provide a good faith estimate of expected charges for items and services to an uninsured (or self-pay) individual, meaning an individual that:

  • Does not have benefits for an item or service under a group health plan, group or individual health insurance coverage offered by a health insurance issuer, federal health care program
  • Has benefits for such items/services under a group health plan, group or individual health insurance coverage offered by a health insurance issuer but does not seek to have a claim submitted to their plan, issuer, or carrier for the item or service.

The good faith estimate must include expected charges for the items or services that are reasonably expected to be provided together with the primary item or service, including items or services that may be provided by other providers and facilities. 

Determining Out-of-Network and Cost-Sharing Rates:

The total amount to be paid to the provider or facility, including any cost sharing, is 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.

Patient-Provider Dispute Resolution

In a situation where an uninsured (or self-pay) individual receives a good faith estimate and then is billed for an amount substantially in excess of the good faith estimate

A patient’s bill will be determined eligible for the patient-provider dispute resolution process if the patient received a good faith estimate, if the process is initiated within 120 calendar days of the patient receiving the bill, and if the bill is substantially in excess of the good faith estimate.

HHS has defined “substantially in excess” as the billed charges being at least $400 more than the good faith estimate for any provider or facility listed on the good faith estimate.

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