A Surprise Update to Surprise Billing

September 28, 2021 - Scott R. Landau / Raquel Frier

Following years of debate and delay, in late December 2020, Congress passed the “No Surprises Act,” to protect patients against “surprise bills” for services provided by out-of-network providers at in-network facilities.  Recently, in July 2021, the Departments of Health and Human Services (HHS), Labor, and Treasury published an interim final rule (“IFR”) implementing certain provisions of the Act. Below is a high-level summary of the key provisions of Act and the IFR, as well as a list of takeaways for providers to consider going forward.

Surprise Billing

Surprise billing occurs when a patient receives a bill after unknowingly receiving care (in both emergent and non-emergent settings) from a provider who does not participate in their health plan network.  Many states, including New York and New Jersey, instituted surprise billing prohibitions over the last few years, with varying and sometimes conflicting provisions and protections.  See, e.g., McKinney’s Financial Services Law § 603(h).  Among other things, the inconsistencies between state-level surprise billing prohibitions led to the birth of a federal solution, the No Surprises Act (the “Act”).

The No Surprises Act

The Act prohibits balance billing for non-emergency services furnished by out-of-network providers during a patient’s visit at an in-network facility unless the patient “waives” their rights under the Act by consenting to receive services from (and be billed) by an out-of -network provider (more on this below). The Act is intended to “protect patients from surprise medical bills and promote fairness in payment disputes between insurers and providers.” Importantly, the Act is not intended to preempt “state-level solutions already on the books” so long as such “solutions” do not prevent the application of federal requirements.

The Interim Final Rule

The IFR prohibits surprise billing in the following three circumstances:

  • When a patient receives emergency services from an out-of-network provider. Under the IFR, “emergency services” include services that may be required if the patient ends up being admitted to the hospital.
  • When a patient receives non-emergency services from an out of network provider at an in-network facility.
  • For air ambulance services.

Under the IFR, patients may waive their rights under the Act and consent to balance billing for services rendered by an out-of-network provider. A valid waiver requires both voluntary and informed consent. To ensure proper consent, the government created a standard notice and consent form; the form requires some customization, including the provider’s name and a good faith estimate of the amount charged for the services provided, and must be made available to patients in the 15 most common languages in the provider’s geographic region.

The IFR also sets forth specific timing protocols. The notice and consent form must be given to the patient either (1) at least 72 hours before their scheduled appointment or (2) on the day of their appointment at least three hours before services are provided. Patients may request a copy of the notice and consent form in any format they select (i.e., e-mail, printout, mail). If a patient signs a notice and consent form, the out-of-network provider is required to send a copy to the patient’s health plan.

If the IFR applies, patients only need to pay their in-network cost share responsibilities for the services received. Where a patient’s cost share amount is based on a percentage of charges, the in-network percentage is applied to the “recognized amount.” The recognized amount is determined, in order of priority, as follows: by (1) An All-Payer Model Agreement, (2) specified state law, or (3) the lesser of (a) the amount billed by the out-of-network provider or (b) the Qualifying Payment Amount (“QPA”). The IFR does not contain time limits as to when a complaint regarding a violation of the Act must be made. The government is, however, currently seeking public comments and suggestions on this issue, and will presumably update the IFR (or make it a non-interim Final Rule at some point) when determinations are made on this issue.

What Do You Need to Know?

Though the IRF is an “interim” rule, it is also a “final” rule –meaning that unlike a proposed rule, it is now in effect. So while additional regulation on open issues is likely to issue in the coming months, provider compliance with the No Surprises Act and its implementing regulations in the IFR is now required.  Providers should thus take steps now to ensure compliance with the IRF, including:

  • Adjusting patient schedules, if needed, to comply with the IFR’s timing protocols regarding notice and consent requirements.
  • Consideration of how the law and rules impact decisions regarding payor network participation.
  • Updates to websites to ensure that they contain the required surprise billing disclosures prior to 1/1/2022.
  • Collaboration with payors to ensure timely communication.

AEL is of course continuing to monitor the landscape and will provide updates as they become available.  In the meantime, if you have any questions about compliance with the No Surprises Act or any state-level surprise billing rules and regulations, please reach out to us and we will be happy to assist.