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Breaking down the No Surprises Act

Now signed into law, the No Surprises Act is part of the Consolidated Appropriations Act of 2021 (H.R. 133; Division BB – Private Health Insurance and Public Health Provisions).

The No Surprises Act addresses surprise medical billing issues at the federal level, establishing patient protections against surprise medical bills along with other provisions (e.g., transparency). Most of the legislation will go into effect on Jan. 1, 2022. The Departments of Health and Human Services (HHS), Treasury and Labor will issue regulations and guidance to implement a number of provisions.

Key points of the No Surprises Act

  1. Both providers and health plans must assist patients in accessing health care cost information.

  2. Patients are protected from receiving surprise medical bills from gaps in coverage for EMS (including air ambulances) and certain services provided by out-of-network providers at in-network facilities.

  3. Patients can be held liable only for their in-network cost-sharing amount, though providers and insurers have the opportunity to negotiate reimbursement. No benchmark reimbursement amount will be set. 
  4. Providers and insurers have access to an independent dispute resolution (IDR) process to settle reimbursement disputes.

Fair and honest cost estimates

This section of the No Surprises Act establishes new stipulations for health plans offering group and individual health insurance coverage to send patients “Advanced Explanations of Benefits” (EOB) prior to scheduled care or upon patient request prior to scheduling. Though a patient can request an Advanced EOB from their health plan, the Advanced EOB requirement is triggered by the provider sending a “good faith estimate,” as stipulated in Section 112 of this legislation, to the plan. 

Advanced EOBs need to include the following pieces of information as quoted from the AHA:

  • If the patient’s provider and facility are in-network and if the item or service is in-network, based on the patient’s health plan.
    • If provider and facility are in-network, the provider must include the contracted rate for the item or service, based on the diagnostic codes. 
    • If a provider or facility are out-of-network, the provider needs to include a description of how to obtain in-network provider information. 
  • The “good faith estimate” of expected charges and likely billing and diagnostic codes, sent by the provider or facility.
  • A “good faith estimate” of the plan’s payment responsibility.
  • A “good faith estimate” of the patient’s expected cost-sharing amount (based on the notification date and not the date of service).
  • A “good faith estimate” of the amount the patient has incurred toward meeting their financial responsibility limits, such as their deductible and out-of-pocket maximums.
  • A disclaimer that coverage for the item or service is subject to a certain medical management technique (e.g., prior authorization), as appropriate.
  • A disclaimer that all information included in the notice is an estimate based on the information known at the time of scheduling or requesting the information and is subject to change.
  • Any other information or disclaimers the health plans determine is appropriate for this notice.

Health plans need to share this information by mail or electronically (based on patient preference) within three business days of receiving a request or notice of service being scheduled (at least 10 business days after notice). If the service is scheduled for less than 10 days after notice, the health plan will need to provide information within one business day.

The patient-provider dispute resolution process will be established by Jan. 1, 2022, “to adjudicate any disputes over pricing for uninsured patients that receive a substantially higher bill than the “good faith estimate” provided prior to service,” summarized the AHA.

Though providers are only federally required to offer good faith estimates to self-pay individuals, many price transparency changes have been made to individual states. See your state's website for local price transparency guidelines. For information about Hospital Transparency guidelines, see this article.

Rivet’s Estimates software offers accurate good faith estimates that you can send to patients via HIPAA-compliant text and/or email, or print out the estimate right in your office. Patients will see their deductible/out-of-pocket maximum met, diagnostic codes, their financial responsibility and their plan’s financial responsibility, prior authorization flags, customized disclaimers and more. Download a free PDF about Rivet's estimates below.

 

Download  Rivet Estimates Info PDF 

Coverage for out-of-network providers at in-network facilities

Health insurers are required to cover out-of-network emergency services and certain non-emergency services performed by out-of-network providers at in-network facilities. No prior authorization is necessary for emergency services. 

“Emergency services” include post-stabilization services, unless certain conditions are met. Those conditions include ability to transfer the individual or the provider has met the notice and consent requirements established in this legislation. (See more about notice and consent requirements here).

As an example, Bob’s child, Jane, obtained a serious injury. He rushed her to their in-network hospital for an ER visit. The only surgeon available to offer lifesaving care is an out-of-network provider. The new No Surprises Act establishes that Jane’s care be billed as in-network, unless notice and consent requirements are met.

This act states that provisions apply to comprehensive individual and group health plans and establishes a process that insurers must follow to calculate a patient's cost-sharing obligation. It also specifies what insurers must reimburse out-of-network providers and establishes a federal oversight audit procedure for this provision.

Health plans must pay or issue payment denial notice to the provider within 30 calendar days after receiving the bill from the provider. Any patient cost-sharing will count toward the patient’s deductible and/or out-of-pocket cost-sharing maximum as if services were provided in-network.

Cost sharing for out-of-network providers at in-network facilities is determined, in part, on two new concepts: recognized amount and qualifying amount. 

The qualifying payment amount (QPA) is used for determining the patient cost-sharing amount unless another state law or policy applies. QPA is generally the plan or issuer’s median contracted rate for the same or similar service in the specific geographic area. 

When another state law or policy applies (i.e., state surprise billing law or an all-payer rate setting model as in Maryland) it is called the recognized amount. This amount will be used in lieu of QPA, if applicable.

This legislation also protects patients with certain circumstances of non-emergency services performed by out-of-network providers at in-network facilities. Under these circumstances, health plans must observe patient cost-sharing as if they were in-network and compensate as previously talked about. 

Reimbursement disputes

For reimbursement disputes, see Section 103 of the No Surprises Act, which talks about a negotiation period and independent dispute resolution (IDR) process. Publicly accessible information on the IDR process will be available on a quarterly basis.

Another issue the No Surprises Act is tackling is surprise air ambulance bills. An air ambulance service is defined as transport using helicopter or airplane. The AHA described the legislation: “Patients would be required to pay only the in-network cost-sharing amount for out-of-network air ambulances and could count the cost sharing toward their deductible. Beginning Jan. 1, 2022, out-of-network air ambulance providers would be barred from sending patients balance bills for more than the in-network cost-sharing amount.”

Reimbursement disputes will undergo a negotiation period and IDR process like the one spoken of previously. This legislation does not apply to ground ambulances.

Miscellaneous parts of the No Surprises Act

Health plan price comparison tool

Health plans must maintain online price comparison tools so that patients can compare expected out-of-pocket costs for items and services across multiple providers. Price comparisons must also be available over the phone. Health plans need to be prepared with price comparison tools for plan years beginning on or after Jan. 1, 2022.

Transparency on insurance ID cards

In Section 107 of the No Surprises Act, health plans offering group and individual health insurance coverage are required to include the following information on insurance identification cards for plan years beginning on or after Jan. 1, 2022:

  • All plan deductibles, including in-network and out-of-network deductible amounts (as applicable).
  • Maximum limits on out-of-pocket costs for both in-network and out-of-network out-of-pocket cost limits (as applicable).
  • A phone number and web address for consumer assistance information, like info on in-network providers.

Ensuring care for women and children

Under this legislation, pediatricians must be able to serve as a child’s primary care provider and ensure that enrollees are able to access obstetrical and gynecological care without a plan-instituted approval process.

Ensuring coverage for continuing care patients

Section 113 of this law ensures services are not hindered for enrollees of health plans when the plans’ provider network changes. 

“These protections extend to individuals defined as a 'continuing care patient' and include patients who are undergoing a course of treatment for a serious or complex condition, undergoing institutional or inpatient care, scheduled to undergo non-elective surgery including post-operative care, pregnant and undergoing treatment, or terminally ill and receiving services,” the AHA summarized.

Health plans are required to timely notify continuing care patients if in-network status of providers and facilities changes. Qualifying patients will have up to 90 days of continued coverage at in-network cost sharing as they transition to an in-network provider.

Provider directory information

Health plans are required to establish a verification process to ensure in-network provider directories are accurate, full of needed information and publicly accessible. 

* Note: Grants for state all payer claims databases and implementation funding were also part of the No Surprises Act. See more info here. 

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To see a quick one page synopsis of all of our three products, click the button below for a free PDF.

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