A new law that will drastically reduce surprise medical bills is expected to take effect Jan. 1, 2022. Surprise bills arise when people unknowingly receive healthcare from out-of-network providers. The No Surprises Act (NSA) will protect patients from receiving big bills from out-of-network providers in emergency situations and certain non-emergency situations.
Interim Final Rule
The NSA was passed in late 2020, and an Interim Final Rule (IFR) providing details on the new law was released in July 2021 by the Department of Health and Human Services, Department of Labor, Department of the Treasury, and Office of Personnel Management. Comments on the IFR were accepted through Sept. 7, 2021, after which amendments may be made.
The IFR bans surprise billing for emergency services, stating that no matter where emergency care is provided, it must be treated as in-network, with no prior authorization required. This provision includes air ambulance services.
The rule also disallows out-of-network charges from nonparticipating providers – such as anesthesiologists, radiologists, consulting specialists, and clinical laboratories – who provide ancillary services while the patient is receiving non-emergency care at a participating hospital or other covered facility.
In these scenarios, balance billing – in which the provider charges the patient the remainder of what the insurance did not pay – will be prohibited. Patients cannot be billed for a higher copayment, coinsurance, or deductible than they would be required to pay for in-network care.
The IFR states patients can be billed at out-of-network rates in scenarios other than those mentioned above, but only if they are given notice and voluntarily consent to the providers’ rates before services are rendered. However, providers cannot ask a patient to consent to out-of-network charges for emergency care or in situations where the facility does not have an in-network provider option. The consent waiver also does not apply to unforeseen or urgent care, or for ancillary services that are not typically selected by the patient, such as radiology, anesthesiology, or pathology.
What the IFR Does Not Cover
The protections in the IFR only apply to emergency services provided at an emergency department of a hospital or an urgent care center that is properly licensed by the state to provide emergency care. Further, the IFR does not apply to healthcare services that are not a covered benefit in the patient’s health plan.
According to the IFC, the total amount to be paid to the provider (including co-payments or other cost-sharing by the patient) will be determined by the state’s All-Payer Model Agreement, if there is one. If the state does not have one, the amount will be determined by a specified state law. If such a law does not exist, the amount will have to be agreed upon by the insurer and the provider. When such an agreement cannot be reached, the amount will be determined through independent dispute resolution.
The No Surprises Act will provide increased protections for consumers who may be unaware that the emergency healthcare service they are receiving is out-of-network. The new law will also remove the patient from billing negotiations between insurers and healthcare providers while clarifying what out-of-network and in-network providers can charge patients for services.
Surprise billing and balance billing were already prohibited by Medicare and Medicaid, and under the Affordable Care Act (ACA). To comply, plans must cover all emergency medical services without requiring preauthorization, and without restricting patients to in-network plans. When emergency care provided is out-of-network, the charges for which the patient is responsible (copayment and coinsurance) must match their in-network rates. The new law emphasizes and broadens consumer protections by tipping the scale away from insurers who retrospectively deny out-of-network emergency care. Once the No Surprises Act is in place, an insurer’s only recourse for denying coverage of an emergency claim will be to assert that the reason for seeking care did not constitute an emergency.