Getting ready for an end to surprise billing

On Jan. 1, a new law will go into effect limiting “surprise” medical bills, or bills patients receive for out-of-network (OON) care, in emergency settings and from out-of-network providers at in-network facilities. The No Surprises Act, enacted in December 2020, is part of the 2020 year-end omnibus spending bill known as the Consolidated Appropriations Act of 2021.

What kind of care does the No Surprises Act apply to?

The No Surprises Act imposes requirements on health care facilities, providers, and group health plans and health insurance issuers offering group or individual health insurance coverage in three distinct areas:

• Emergency services

Under the No Surprises Act, a health plan that provides emergency coverage must provide that coverage without prior authorization, without regard to whether a facility is in-network or OON, and regardless of other terms of the plan (except for exclusions or coordination of benefits). Health plans also cannot deny claims for emergency coverage based on an after-the-fact assessment of the care provided, any purported delay between when symptoms began and when the patient sought care, or based on how long the symptoms were present.

Similarly, emergency health care facilities (including independent, freestanding emergency rooms and urgent care centers licensed to provide emergency care) also cannot balance bill patients for OON emergency care. Instead, patient’s bills are limited to the same cost-sharing as for in-network emergency care, and any patient payments must apply to the patient’s deductibles and out-of-pocket maximums. Emergency care also includes post-stabilization services, or services and items provided as part of outpatient observation or inpatient or outpatient stay with respect to emergency visits. Only after a patient is stable and can be moved to an in-network facility using non-medical transport (as determined by the patient’s treating provider) can a facility or provider seek the patient’s consent to paying OON rates.

• Nonemergency services provided by out-of-network providers at in-network facilities

The No Surprises Act also prohibits OON providers from balance billing patients for services provided at in-network facilities. For this restriction to apply, the facility has to have a contractual agreement with the patient’s health plan. It does not apply to OON facilities.

• Air ambulance services

The No Surprises Act also prohibits balance billing for OON air ambulance services, but not services provided by ground ambulance. Air ambulance services are expensive, and often provided on an OON basis.

Requirements and Penalties Under the No Surprises Act

As of the date of this article, many of the details of how the No Surprises Act will be implemented and enforced are forthcoming. However, by Jan. 1, 2022, health care providers and facilities should begin work to ensure that they fulfill the Act’s preliminary requirements, which include:

• Public Disclosures

Beginning in January, health care providers and facilities must provide—to both the public and patients with applicable health plans – a one-page disclosure providing a plain-language explanation of the requirements and prohibitions of the No Surprises Act. The disclosure has to be publicly posted, available on a public portion of a provider or facility’s website, and be provided to applicable patients prior to the patient receiving a bill. The disclosure must also include information regarding the process through which patients can complain about alleged violations.

• Prohibition on balance billing out-of-network patient directly

Under current law, health care providers and facilities may bill OON patients directly, requiring the patient to seek reimbursement from his or her health plan. The No Surprises Act bars this practice. Instead, facilities and providers must determine what patients are in-network versus out-of-network, and negotiate any payment amounts for OON care with the patient’s health plan, rather than billing the patient and requiring the patient to negotiate with the plan.

• Patient consent

The No Surprises Act allows patients to waive its protections with regard to certain nonemergency services and ancillary services (including emergency medicine, anesthesiology, pathology and radiology), but there are strict notice and consent requirements that apply. If a provider seeks to have a patient waive the act’s protections, the provider has to give the patient a detailed written consent form at least 72 hours prior to a scheduled appointment, or three hours before a same-day appointment.

More details about the required consent are imminent, but the existing regulations require that the consent form be provided to the patient separate from other forms, and indicate: whether pre-authorization is required; what in-network providers are available; and the good-faith cost estimate for the total bills for the proposed out-of-network care. The third requirement—the good-faith cost estimate—will be the subject of further rulemaking, and will not be immediately enforced. The good-faith cost estimate also triggers health plans to provide an advanced explanation of benefits, giving patients information regarding not just the total cost of the out-of-network care, but the patient’s likely out-of-pocket expenses.

Patients have to give their consent to OON treatment voluntarily and can do so on a provider-by-provider, or service-by-service basis. Patients can also withdraw their consent at any time. Providers and facilities must give patients copies of any consent forms they sign, and keep the forms for seven years. Providers and facilities also must submit the consent forms to patients’ health plans.

If a patient declines to waive the No Surprises Act protections, an OON provider can refuse to provide treatment, unless there is no in-network option, or there is another law barring such a refusal. However, the provider cannot pressure a patient into waiving their rights, including by delaying necessary treatment, or charging cancellation fees for existing appointments.

It is hoped and expected that there will be further guidance on what providers and facilities will be paid for providing OON care, and how claims and appeals will be handled, in the near future.

Health care providers and facilities will need to implement new processes for ensuring patients do not get hit with surprise bills, including by working with payers to deliver the “advance explanation of benefits” to its patients before their appointments. Providers will also be hearing from their payers more often, as requirements that used to apply only to government health plans (like Medicare, Medicaid and Exchange plans) now affect all health insurers.

Providers, facilities, and health plans that bill patients in violation of the No Surprises Act are subject to civil monetary penalties of up to $10,000. However, such penalties do not apply if the facility or provider does not knowingly violate the law, should not have reasonably known that it violated the law, withdraws the bill within 30 days, and reimburses any payments received plus interest.

The No Surprises Act is a complicated statute, and many details regarding how it will be applied and enforced are still forthcoming. However, health care providers, particularly practitioners and facilities, need to be aware of it and ignore it at their own peril. They would be wise to contact an experienced health care attorney to ensure they comply with these complex and strict requirements.

Vasilios J. (Bill) Kalogredis, has been advising physicians, dentists, and other health care professionals and their businesses as to contractual, regulatory and transactional matters for over 45 years. He is chairman of Lamb McErlane’s Health Law Department. Contact him at bkalogredis@lambmcerlane.com or 610-701-4402.

Rachel E. (Lusk) Klebanoff is a senior associate at the firm who focuses on health law and health care litigation. She represents physicians, dentists, medical group practices, and other health-related entities in transactional, regulatory, and compliance matters. Contact him at rlusk@lambmcerlane.com or 610-701-4416.