Surprise Billing: What Providers Must Know

Requirements Related to Surprise Billing

Biden-Harris Administration, through the U.S. Departments of Health and Human Services (HHS), Labor, and Treasury, and the Office of Personnel Management, issued ‘Requirements Related to Surprise Billing; Part I, ‘an interim final rule that will restrict excessive out of pocket costs to consumers from surprise billing and balance billing. Surprise billing happens when people unknowingly get care from providers that are outside of their health plan’s network and can happen for both emergency and non-emergency care. Balance billing, when a provider charges a patient the remainder of what their insurance does not pay. 

Surprise bills lead the list of affordability concerns for many families; 2 in 3 adults say they worry about unexpected medical bills, more than the number worried about affording other health care or household expenses. Among privately insured patients, an estimated 1 in 5 emergency claims and 1 in 6 in-network hospitalizations include at least one out-of-network bill. Balance billing on surprise medical bills can reach hundreds or even thousands of dollars. Surprise medical bills are not a problem today under public programs i.e., Medicare and Medicaid both prohibit balance billing.

The No Surprises Act contains key protections to hold insurers harmless from the cost of unanticipated out-of-network medical bills. Surprise bills arise in emergencies when patients typically have little or no say in where they receive care. They also arise in non-emergencies when patients at in-network hospitals or other facilities receive care from ancillary providers (such as anesthesiologists) who are not in-network and whom the patient did not choose.

This rule will provide protection to Americans insured through employer-sponsored and commercial health plans. A health plan that generally doesn’t cover out-of-network care, such as an HMO, might deny a surprise bill entirely. Or plans might pay a portion of the bill, but leave the patient liable for balance billing, the difference between the undiscounted fee charged by the out-of-network provider and the amount reimbursed by the private health plan. The law contains key provisions to protect consumers against the cost of surprise medical bills. 

Balance Billing is Prohibited 

Out-of-network providers for emergency services are not allowed to balance bill patients beyond the applicable in-network cost-sharing amount for surprise bills.  This same requirement applies to out-of-network providers who render non-emergency services at an in-network hospital or other facilities.  An exception applies for certain non-emergency services if providers give prior written notice at least 72 hours in advance and obtain the patient’s written consent. The notice must indicate the provider does not participate in the network, provide a good faith estimate of out-of-network charges, and include a list of other participating providers in the facility whom the patient could select. This exception does not apply for ancillary services (such as anesthesia) or diagnostic services (such as radiology and lab) nor to other services or providers the Secretary may specify in regulation.

Out-of-network providers can’t Bill Excess

No surprises act specifies that providers ‘shall not bill, and shall not hold patients liable’ for an amount that is more than the in-network cost-sharing amount for such services. The ‘shall not bill’ language did not appear in earlier bill versions and constitutes an additional element of consumer protection under the new law. Essentially it puts the burden on out-of-network providers to determine a patient’s insurance status and the applicable in-network cost-sharing for the surprise medical bill.  Absent the ‘shall not bill’ language, nonparticipating providers might continue to bill patients for the full amount, and only later refund excess amounts when and if patients learn surprise billing protections apply.

In summary, no surprises act: 

  • Bans surprise billing for emergency services. Emergency services, regardless of where they are provided, must be treated on an in-network basis without requirements for prior authorization.
  • Bans high out-of-network cost-sharing for emergency and non-emergency services. 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.
  • Bans out-of-network charges for ancillary care (like an anesthesiologist or assistant surgeon) at an in-network facility in all circumstances.
  • Bans other out-of-network charges without advance notice. Health care providers and facilities must provide patients with a plain-language consumer notice explaining that patient consent is required to receive care on an out-of-network basis before that provider can bill at the higher out-of-network rate.

No surprised act takes effect for health plan years beginning on or after January 1, 2022, and it applies to nearly all private health plans offered by employers (including grandfathered group health plans and the Federal Employees Health Benefits Program), as well as non-group health insurance policies offered through and outside of the marketplace. To get the latest updates on medical billing and coding, subscribe to our newsletter or visit our latest blog section.