Health care costs for any patient can be unpredictable and at times unexpected. Promoting transparency in the pricing of health care will help alleviate this problem. Per executive order, the Centers for Medicare and Medicaid Services (CMS) issued their final rule requiring hospitals to publish a list of both standard and contracted rates for services provided. This rule went into effect on January 1, 2021. The goal of this rule is to have patients become more conscientious of impending health care costs making them better able to anticipate medical bills.
Health insurance plans have an established network of doctors and hospitals that patients are encouraged to choose from for medical services. This network is based upon financial agreements between the health plans and participating providers to deliver medical care to patients at a contracted rate. Most surprise bills arise when you see a provider who is non-participating because they do not have an agreement with the health plan. As many as 41 percent of insured adults were surprised by a medical bill in the past two years and almost half of those, 19 percent, received a surprise medical bill because the provider was out-of-network [1].
On December 21, 2020, the No Surprises Act of the Consolidated Appropriations Act of 2021, H.R. 133 (116th), was passed with bipartisan support furthering the federal effort in preventing patients from receiving surprise medical bills. This legislation will go into effect on January 1, 2022. The new law outlines the requirements of the health insurance company, the health care provider, and the health care facility in alleviating surprise medical billing. The law will also incorporate a patient-provider dispute process designed to resolve billing issues.
If a health plan covers emergency services, the plan shall cover these services: (i) without the need for any prior authorization determination; (ii) regardless of whether the health care provider is a participating provider or participating facility or a non-participating provider or a non-participating facility; (iii) without imposing any limitation on coverage that is more restrictive than the requirements or limitations that apply to emergency services received from participating providers and facilities; and (iv) the facility or provider shall not bill or hold liable the patient for an amount more than the cost-sharing charged by a participating provider or a participating facility in their health plan[2].
There is a notice requirement that needs to be given by the provider and a consent requirement that need to be obtained by the patient. A non-participating provider or non-participating facility satisfies the notice requirement if the provider clearly states that consent to receive services is optional and that the patient may instead seek care from a participating provider or at a participating facility. The notice also needs to include: (i) a good faith estimated amount that the provider or facility may charge the patient for services; (ii) a list of any participating providers at the facility who can furnish services and notification that the patient may be referred, in the case of a participating facility and a nonparticipating provider; and (ii) information about whether prior authorization may be required in advance of receiving medical care[3].
The consent by the patient to be treated by a non-participating provider or non-participating facility: (i) acknowledges that the patient has been provided written notice; (ii) informed that the payment by the patient may not accrue toward meeting any limitation that the plan or coverage places on cost-sharing, including an explanation that such payment may not apply to an in-network deductible applied under the plan or coverage; and (iii) the consent must document the date when the patient received the written notice and the date when the patient signed the consent [4].
The No Surprises Act is currently being shaped by proposed rules before the law takes effect on January 1, 2022. This rulemaking process will help iron out the details before the implementation of the provisions of the law. One such provision requires the establishment of a patient-provider dispute process for dispute resolution for surprise billing no later than January 1, 2022. On September 10, 2021, a new rule was proposed to establish a process for investigating complaints and enforcing penalties for noncompliance. Comments on the proposed rule are now being accepted before the rule becomes final. The executive order requiring hospitals to disclose their pricing lists for increased transparency combined with the law to prevent surprise billing will have a positive impact in eliminating a patient’s medical debt strengthening their overall financial health.
[1] Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health & Human, Services. Secretary of Health and Human Services’ Report on Addressing Surprise Medical Billing. 2020. Surprise Medical Billing (hhs.gov)
[2] Public Law No: 116-260.
[3] Public Law No: 116-260.
[4] Public Law No: 116-260.