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A Better Partnership


Dec 2021
December 15, 2021

The Holiday Surprise of the No Surprise Act

As an experiment, several years ago I began asking my health care providers how much my visit/procedure would cost. The responses varied from “why do you care; you are insured” to “I have absolutely no idea.” No responsible person would agree to pay for, say, an electrician without knowing the cost up front. But everyday people agree to expensive medical services without knowing the cost first. More than one patient has received a nasty surprise when they get their final bill, particularly if they went to a provider who is not in their network. This lack of price transparency has contributed to an epidemic of medical debt, which now exceeds $140 billion.
Some of this debt can also be attributed to the practice of “balance billing,” where a health care provider will bill patients who are not in their network the difference between what they charge for the service and what the out-of-network insurance company agrees to pay. Patients who receive services from out-of-network physicians can unwittingly run up substantial “surprise” costs.
In an effort to promote transparency and eliminate surprise medical bills, in December of 2020 Congress enacted the “No Surprise Act” (NSA). After two recent rounds of rulemaking by the Centers for Medicare & Medicaid Services (CMS) and the Department of Labor, totaling nearly 300 pages of regulations and commentary, this law is set to take effect on January 1, 2022. Health care providers and facilities which are not prepared to implement these new regulations by that date are in for a nasty surprise themselves, which can include civil monetary penalties of up to $10,00 for each violation. The NSA has three major provisions:

  1. First, providers are required to ask their patients whether they are insured and if they intend to submit a claim for the service to their insurance provider. If the individual is not insured, the provider, upon request, must provide the patient with a “good faith estimate” of the cost of the service. If the cost of the service ultimately exceeds $400 of the good faith estimate, the patient may submit the claim to what is essentially binding arbitration. The ultimate decision as to whether the patient will have to pay the additional cost will be made by an “independent dispute resolution” entity appointed by CMS. Insured patients receive similar protections, working through their insurance provider.

    Along with this requirement, providers must also post in a conspicuous place, and on their website, a notice advising individuals of their rights under the NSA. An example of the required notice can be found here.

  2. Second, the NSA forbids hospital-based and freestanding emergency facilities from engaging in “balance billing” for emergency services provided to patients who are not in their network. Providers of emergency services may only charge out of network patients the copayment or coinsurance amounts required by the patients insurance. In essence the NSA erases for emergency room services the difference between “in network” and “out of network” patients. 

  3. Third, the regulations forbid “out of network” providers from balance billing any patient who receives service from them in an in-network hospital or ambulatory surgical center. Per CMS, this rule “applies to emergency medicine, anesthesia, pathology, radiology, laboratory, neonatology, assistant surgeon, hospitalist or intensivist services.” Instead, such providers can only charge the patient the normal cost sharing charges required by the patient’s insurance. These protections cannot be waived by the patient. Again, this section essentially eliminates the distinction between “in network” and “out of network” patients for physicians who provide services in hospitals and ASCs.

The 300 pages of guidance, regulations and commentary published by CMS and other government agencies contain a number of other protections too lengthy to list here, including special regulations governing how much air ambulances may charge. With little time left for the unprepared, there are three important take home points:

  1. First, prepare the required notice and post it both in your office(s) and on your website.

  2. Second, both hospitals and ASC’s must train their coding/billing departments on the new requirements.

  3. Finally, take a deep breath.

The current rules are “interim,” which means more rules and guidance will be coming shortly. We will keep you updated.

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