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Surprise Medical Billing

Summary

The Biden administration released a series of interim final rules (IFR) with comments aimed at shielding patients from increased financial hardships stemming from surprise medical bills in accordance with the No Surprises Act, that was passed by Congress and signed into law by former President Trump on December 27, 2020, and will take effect on January 1, 2022.  

The first interim rule was released on July 1, 2021 and implemented many of the law’s requirements for group health plans, health insurance issuers, carriers under the Federal Employees Health Benefits (FEHB) Program, health care providers and facilities, and air ambulance service providers. Among other provisions, the IFR implements the Independent Dispute Resolution (IDR) process that can be used to settle out-of-network payment disputes between payers and physicians and other health care “providers” in surprise billing situations.

This rule:

  • Bans surprise billing for emergency services. Emergency services, regardless of where they are provided, must be treated on an in-network basis without requirements for prior authorization.
  • Bans high out-of-network cost-sharing for emergency and non-emergency services. Patient cost-sharing, such as co-insurance or a deductible, cannot be higher than if such services were provided by an in-network doctor, and any coinsurance or deductible must be based on in-network provider rates.
  • Bans out-of-network charges for ancillary care (like an anesthesiologist or assistant surgeon) at an in-network facility in all circumstances.
  • Bans other out-of-network charges without advance notice. Health care “providers” and facilities must provide patients with a plain-language consumer notice explaining that patient consent is required to receive care on an out-of-network basis before that “provider” can bill at the higher out-of-network rate.

The second Interim rule, released on September 30, 2021, builds on the July 1, 2021 rule. It implements additional protections against surprise medical bills under the No Surprises Act, including provisions related to the independent dispute resolution (IDR) process, good faith estimates for uninsured (or self-pay) individuals, the patient-provider dispute resolution process, and expanded rights to external review.

This rule outlines the processes for payers and physicians and other healthcare “providers” to settle disputes over out-of-network payments beginning with a 30-day open negotiation period. If they fail to negotiate an agreement, a formal IDR process, using an outside entity to weigh their cases, may be initiated by either side to come up with an agreement based on the “qualifying payment amount (QPA)” (median-in-network rate). The rule clarifies that before any dispute can begin, that an initial payment or notice of denial must be sent to the provider and any initial payment should be an amount that the plan or issuer reasonably intends to be payment in full based on the relevant facts and circumstances.

The rule also establishes a new dispute resolution process for uninsured patients who believe they’ve received an overly pricey medical bill. Physicians and other “providers” will now be required to give patients an estimate of their costs prior to a procedure. If the charges ultimately prove to be much higher, uninsured patients can enlist an outside arbitrator to challenge them.

ACP has submitted comments to CMS based on ACP’s guiding policy on surprise medical bills which is outlined in its position paper entitled, “Improving Health Care Efficacy and Efficiency Through Increased Transparency.”

Key ACP Principles

Hold Patients Harmless: Provide protections for patients from unexpected out-of-network health care costs, particularly for costs incurred during an emergency situation or medical situation in which additional services are provided by out-of-network clinicians without the patient’s prior knowledge.

Ensure Network Adequacy: How network adequacy and the fair payment of services for physicians may contribute to the increase in patients receiving out-of-network care should also be examined by Congress to ensure an appropriate number of available in-network physicians, especially in the emergency setting. Health plans also have an affirmative obligation to pay fairly and appropriately for services provided in- and out-of-network, and regulators should ensure network adequacy in all fields, including emergency care.

Opt for Fair Arbitration of Payment Instead of Set In-Network Rate: Caps on payment for physicians treating out-of-network patients should be avoided, preferably by establishing an arbitration process that would allow an independent arbitrator to establish an appropriate and fair payment level between the insurers’ in-network rate and the clinician’s charge.

Resources