The issue of patients receiving large, unexpected medical bills from hospitals and physicians has been widely publicized. This situation, known as surprise billing, arises when a hospital or physician provides medical care to a patient but is not participating in a patient’s insurance network. We have reported on the many states that have put legislation in place to try and mitigate the problem for their own residents, but now there will be a nationwide policy thanks to recent federal legislation.
The No Surprises Act (the Act) is part of the Consolidated Appropriations Act that was signed in late December 2020; it will become effective January 1, 2022. The Act places a limit on a patient’s financial obligation in both emergency and non-emergency situations where either the facility or the physician does not participate with the patient’s health insurance plan. In such circumstances, the patient’s out-of-pocket exposure will be limited to the amount that would have been paid for services provided by an in-network provider. This is generally the co-payment, coinsurance, or deductible amount described in the patient’s insurance plan.
This federal law will not supersede state laws in those states* where comprehensive surprise billing laws already exist. It also will not preclude states from passing future surprise billing legislation that will govern that state’s insurance plans.
Patients will be protected under the Act for emergency services that are rendered until they are stabilized. At that point they may either consent to be transferred to an in-network facility or physician, or voluntarily consent to continue to receive out-of-network services. In non-emergency situations, providers in facilities where there are in-network providers available may request a consent waiver, signed and dated by the patient, that will allow them to balance bill the patient. However, radiologists and other ancillary service providers may not use consent waivers and must abide by the in-network payment policies of the Act.
The written consent waiver is to be given to the patient 72-hours in advance and must include:
- a statement that the provider is not in the patient’s insurance network,
- a good faith estimate of the cost of the services,
- a list of in-network providers at the facility (if the facility is in-network),
- information on any prior authorization or other care management requirements, and
- a clear statement that consent is optional, and the patient can instead opt for an in-network provider.
If the patient’s non-emergency appointment is less than 72 hours in the future, then the notice is to be given at the time the appointment is made.
Independent Dispute Resolution (IDR)
The patient is taken out of the middle of any dispute over payment between the provider and the insurance plan. The provider must bill the patient’s insurance plan and the plan must pay the provider directly; the law specifies that payment may not be made to the patient. The provider may choose to accept the insurer’s payment or, if the provider does not accept the payment made, then the provider and insurer will have 30 days to negotiate and resolve the rate of payment. If they fail to reach agreement, then either party has four days to request an IDR. Under IDR, each party will offer an amount to an arbitrator, who will select one amount or the other with no ability to split the difference. This decision is binding on the parties, and neither may repeat the process for the same item or service with the same party for 90 days. The losing party pays the cost of the arbitration process.
Impact on Radiologists
Since radiologists are prohibited from bypassing the No Surprises Act through the use of a consent waiver, they will be faced with the prospect of having to modify some procedures for out-of-network patients. The Act prohibits billing the patient, so radiology practices will have to be even more diligent about working with the hospital registration system to obtain accurate insurance information. They will have to review all out-of-network payments from insurance plans with which they do not have a contract in a timely manner, because the Act requires that negotiations over a disputed amount must take place within 30 days of the receipt of payment. It will be useful for a practice to develop a schedule of minimum acceptable amounts in advance; this will allow payments at or above the minimum to be accepted so that only those falling below the minimum are selected for appeal to the payer. Over time the practice will reach a level of agreement with most of the insurance plans for out-of-network payments, which might even lead to a formal participation agreement.
It is important to note that this new federal Act will not apply in states* that have their own comprehensive balance billing protection in place. The federal law goes into effect in 2022, so there is time to prepare your practice’s workflows and policies to ensure compliance. We will continue to provide updates to this law and others that affect your practice. Subscribe to this blog for the latest information.
* As of November 30, 2020, The Commonwealth Fund considers the following to have comprehensive balance billing laws in place:
California, Colorado, Connecticut, Florida, Georgia, Illinois , Maine, Maryland, Michigan, New Jersey, New Mexico, New York, Oregon, Texas, Virginia, Washington