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Not All Surprises Are Presents: Preventing Surprise Medical Bills under the No Surprises Act

To address surprise medical costs for consumers, Congress recently passed an extremely complicated bill: No Surprises Act (“The Act”). No Surprises Act aims to prevent surprise medical bills or balance billing in the American health care system. Specifically, The Act prevents surprise medical bills when patients receive emergency care or are treated by an out-of-network provider at an in-network hospital or ambulatory surgical center.

The Journal of the American Medical Association (JAMA) reports that one in five insured adults have received a surprise medical bill in the past two years, and 18% of emergency room visits resulted in at least one surprise bill.[1] Most notably, the Act requires health care providers give patients, particularly underinsured patients, a “good faith estimate” of their medical expenses in advance to help patients predict their medical costs for treatments prior to receiving care. “Underinsured patients” are defined broadly as persons who are not enrolled in an insurance plan, not covered by a federal healthcare program, or not seeking to file a claim with their insurance for care. The “good faith estimate” requirement will go into effect on January 1, 2022. As a result, health care providers must be prepared to comply with The Act in less than a week. 

UNDERSTANDING THE NO SURPRISES ACT

Starting Jan. 1, 2022, providers will be unable to bill patients for more than the in-network cost-sharing price if the patient did not choose or know that the service would come from an out-of-network provider pursuant to the No Surprises Act.[2] The practical implications of The Act’s “good faith estimate” requirement will result in a significant change in how providers manage billing practices and interactions with other providers in the community.

The Act contains a timeline for when the good faith estimate must be provided. When the service is scheduled more than three (3) business days in advance the estimate must be given within one (1) business day after scheduling. When the service is scheduled more than ten (10) business days in advance, the estimate must be provided within three (3) business days of scheduling. When the service is scheduled three (3) to ten (10) business days in advance, the estimate must be provided within one (1) business day. If the underinsured person requests a good faith estimate, it must be provided within three (3) business days.

The Act requires that health care providers and facilities:

  1. Provide the good-faith estimate to patients before an item or service is scheduled, within the designated timeframes listed above. 
  2. Offer an itemized list of each item or service, grouped by the provider or facility offering care. Additionally, each item or service has to have specific details, like the health care code assigned to it and the expected charge. 
  3. Explain the good-faith estimate to the patient over the phone or in-person if the patient requests, and then follow up with a paper or electronic estimate.
  4. Provide the good-faith estimate in a way that is accessible to the patient using clear and understandable language.

For example, if a patient is receiving surgery, the estimate should include the cost of the surgery, any labs or tests, and the anesthesia that might be used during the operation. If an item or service is something that’s not scheduled separately from the surgery itself, it should be included in the good-faith estimate. But, items or services related to the surgery that are scheduled separately, like pre-surgery appointments or physical therapy in the weeks after the surgery, won’t be included in the good-faith estimate.[3]

Additionally, the legislation contains provisions allowing healthcare providers and insurers to negotiate reimbursement separately while insulating the patient from that process. It also includes a provision for an independent dispute resolution process if necessary. The Departments of Health and Human Services (HHS), Treasury, and Labor are tasked with issuing regulations and guidance to implement the No Surprises Act, most of which is set to go into effect on Jan. 1, 2022.[4]

THE NO SURPRISES ACT AND HEALTHCARE COST TRANSPARENCY

The No Surprises Act increases healthcare cost transparency in three ways:[5]

  1. It requires insurers and providers to maintain up-to-date provider directory information.
  2. It requires insurers to disclose in-network and out-of-network deductibles and out-of-pocket limits prior to patients being charged.
  3. It requires both insurers and providers to provide patients with good-faith cost estimates in advance of medical services.

COMPLIANCE WITH THE ACT

The Center for Medicare and Medicaid Services (“CMS”), the federal agency charged with implementing federal healthcare programs, has released templates and guidance for providers and facilities subject to The Act’s requirements. These documents[6] provide guidance to healthcare providers and protection to healthcare consumers when consumers receive emergency care, non-emergency care from out-of-network providers at in-network facilities, and air ambulance services from out-of-network providers.

Importantly, CMS’s documents are templates, and may not contain all the pertinent or relevant requirements covering the specific situation at issue. Thus, it is important to review all the relevant provisions of The No Surprises Act. CMS’s templates must be evaluated to assure that the patient’s unique circumstances are addressed when used.

CONCLUSION

When the No Surprises Act takes effect on Jan. 1, 2022, healthcare providers may be subject to penalties if deemed to be out of compliance. To prevent any potential penalties, healthcare providers should carefully implement new policies and procedures. To discuss these issues or any other concerns you may have with ensuring compliance with all binding laws and regulations in your community, contact your McBrayer attorney today.

Lisa English Hinkle is a Member of McBrayer law. Ms. Hinkle chairs the healthcare law practice and is located in the firm’s Lexington office. Contact Ms. Hinkle at lhinkle@mcbrayerfirm.com or (859) 231-8780, ext. 1256.




Jonas Bastien is an Associate of McBrayer Law. He practices with the healthcare and litigation groups in the firm's Lexington office. Mr. Bastien can be reached at jbastien@mcbrayerfirm.com or (859) 231-8780, ext. 1029.


[1] JAMA Network. "US Statistics on Surprise Medical Billing." Accessed December 6, 2021.

[2] CMS.gov. "Ending Surprise Medical Bills." Accessed Oct. 7, 2021.

[3] https://www.cms.gov/nosurprises/consumer-protections/Understanding-costs-in-advance

[4] U.S. Congress. "Consolidated Appropriations Act, 2021." Page 1577. Accessed December 6, 2021.

[5] TaylorEnglish.com. "Transparency Rule & No Surprises Act Chart." Accessed December 6, 2021.

[6] Center for Medicare and Medicaid Services, https://www.cms.gov/regulations-and-guidancelegislationpaperworkreductionactof1995pra-listing/cms-10791, “Requirements Related to Surprise Billing; Part II.”

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