On Dec. 27, 2020, President Donald Trump signed into law the Consolidated Appropriations Act of 2021. This legislation includes, among other things, the No Surprises Act (Act), which becomes effective Jan. 1, 2022. The Act attempts to strengthen consumer protections for patients by addressing situations where patients receive unexpected or "surprise" medical bills for their health care services and, also, to provide patients with transparency in dealing with health insurance plans. "Surprise bills" typically result from emergency care services delivered by an out-of-network facility or by a doctor at an in-network facility.
"The Act . . . requires health plans and out-of-network healthcare providers to hold patients harmless and prohibits out-of-network providers from charging patients more than in-network amounts for emergency services and non-emergency services in certain situations." Epstein Becker Green - Helaine I. Fingold, Jonah D. Retzinger and Alexis Boaz, The No Surprises Act: Implications for Health Plans, Health Care Facilities, and Health Care Providers, Lexology (December 27, 2020). In addition to surprise billing prohibitions, the Act impacts health plans, health care facilities and health care providers in several ways. For example, the Act requires that health plans cap the financial responsibility of its enrollees at the amount of in-network cost sharing amounts charged by out-of-network emergency service providers. The Act also prohibits health plans from imposing limitations on coverage for patients receiving emergency services from out-of-network providers - these new limitations are even more restrictive than the limitations on coverage for in-network services.
Regarding health care facilities and providers, the Act prevents out-of-network providers at in-network facilities from balance billing patients for non-emergency care, unless they obtain patient consent. Patients will still be required to pay the in-network cost-sharing amount. Out-of-network facilities and providers of emergency services are also prohibited from billing insured patients or holding those patients responsible for costs that exceed a cost-sharing requirement that may be even less than the required amount applied had the same services been provided by an in-network facility or provider. These prohibitions differ depending on the type of emergency and non-emergency services and whether the providers are in- or out-of-network.
Perhaps the most important aspect of the Act addresses negotiation and independent dispute resolution (IDR) for rate disputes between health plans and out-of-network facilities and providers. The Act states that various agencies will jointly issue regulations by December 2021 which will set forth specific IDR processes. However, the Act sets forth several parameters for the IDR process which gives providers and insurers 30 days to negotiate and agree to the price in dispute for the medical services. If the providers and insurers are unable to reach an agreement, they are required to enter binding arbitration before a certified IDR entity.
Finally, the Act sets rigid penalties for violations of balance billing rules, requires a consumer complaints process to be implemented and grants appeal rights to consumers whose plans fail to cover surprise medical bills.
The prohibitions and requirements discussed here are merely an overview of what the Act addresses in its attempt to take out financial shocks for patients when it comes to medical bills. The federal government will issue further guidance between now and when the law takes effect in January of 2022.
Originally published 13 July 2021 .
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