No Surprises Act Provides Help for Medical Bills

At the end of 2020, the No Surprises Act was enacted to provide protection against surprise medical bills.  Earlier this month, an interim final rule containing guidance for the new law was issued by Health and Human Services.  According to the release that accompanied the new guidance, under the new law, “Patient cost-sharing, such as co-insurance or a deductible, cannot be higher than if such services were provided by an in-network doctor, and any coinsurance or deductible must be based on in-network provider rates.”

The law is designed to end unexpected or “surprise” medical bills or balance bills when a patient is treated at an in-network facility by an out-of-network provider.  Surprise bills typically arise during trips to the emergency room as the patients have no say in who provides their care.  Surprise bills can also come up in non-emergency situations when in-network providers use non-network ancillary providers (such as radiologists or anesthesiologists) and the patient is not informed.  Balance billing occurs when a provider charges a patient for the portion of the bill not paid by insurance.

The new law is effective for group health plans for plan years beginning on or after January 1, 2022. The law applies to almost all group health plans (including grandfathered group health plans) and non-group health insurance policies, including those offered via the Marketplace Exchanges.  The law is effective for health care providers as of January 1, 2022.

The interim final rule is quite complex and detailed.  As a brief overview, the final rule, among other provisions:

  • Prohibits surprise billing for emergency services as all emergency services must be treated as in-network and not require pre-authorization.
  • Provides that any patient cost-sharing, such as co-insurance or deductible amounts, must be the same as if the services were provided by an in-network doctor.
  • Prohibits out-of-network charges for ancillary care (like an anesthesiologist) at an in-network facility in all circumstances.
  • Prohibits out-of-network charges being assessed in a non-emergency setting by a provider without advance notice.
  • Provides for a federal, external appeal right for patients if they feel they received a surprise medical bill. This external appeal right will be in addition to any health plan based claims and appeals procedures that may apply.

With regard to balance billing, out-of-network providers for emergency services are not allowed to balance bill patients beyond the applicable in-network amount.  For non-emergency services by out-of-network providers at in-network facilities, this same rule applies.  There are some exceptions if the patient provides consent to the use of an out-of-network provider. Importantly for balance billing, the new law states that providers “shall not bill, and shall not hold patients liable” for an amount that is more than the in-network amount for services.   This “shall not” language puts the burden on a provider to bill the appropriate amount rather than overcharge and then issue a refund if the patient catches the surprise balance bill.

This new law and related guidance should be a welcome protection for patients.  However, implementation of these provisions will likely require a good deal of cooperation between providers, insurance companies, third-party administrators, and plan sponsors.  If you have questions about the No Surprises Act or any benefits related issue, please contact any of Graydon’s employee benefits team.