Medical Billing, Healthcare Regulations

# No Surprise Billing Act Breakdown: Understanding the New Healthcare Law

- May 27, 2024
- Posted by Kristen Edwards

01 Mar

Surprise medical billing act has been a significant source of stress and financial burden for Americans, prompting critical legislative actions to address the issue. The No Surprises Act, instituted by the federal government, represents a major step in protecting patients against unexpected and often exorbitant fees charged by out-of-network healthcare providers during medical emergencies or situations where patients are unable to choose an in-network provider.

Providers and facilities now bear the responsibility to clearly inform patients about the network status of their care and any potential out-of-network charges. This act also sets up a dispute resolution process to mediate between healthcare providers and insurers, ensuring that payment disputes do not fall on the shoulders of the patients.

### Key Takeaways

- The No Surprises Act safeguards patients from unexpected out-of-network medical bills.
- Healthcare providers must now clearly disclose network status and potential additional charges.
- A dispute resolution process has been established to handle payment disputes between providers and insurers.

## Overview of the No Surprise Billing Act

The No Surprises Act represents a significant piece of legislation aimed at protecting consumers from unexpected medical bills for out-of-network services. Enacted as part of the Consolidated Appropriations Act of 2021, its provisions went into effect on January 1, 2022.

Key Protections include:

- Emergency Services: Requires insurers to cover emergency services without prior authorization and to charge in-network cost-sharing rates, even if the services are provided out-of-network.
- Non-Emergency Services: Bans out-of-network charges for non-emergency services performed at in-network facilities without the patient’s informed consent.
- Air Ambulance: Provides safeguards against high out-of-network bills for air ambulance services.

Billing Process:

- In-Network Cost Sharing: Patients’ cost-sharing responsibilities, such as deductibles and co-payments, are based on in-network rates.
- Billed vs. Qualifying Payment Amount: The amount paid is the lower of the billed rate or the Qualifying Payment Amount, which is a benchmark rate based on insurers’ median in-network rates.

The Act supplements rather than supplants state surprise billing laws, creating a “floor” for consumer protections. It includes an Independent Dispute Resolution (IDR) process when disagreements arise between providers and insurers over payment amounts.

Healthcare providers and facilities are also required to provide good faith cost estimates to uninsured and self-pay patients for services upon request, further safeguarding consumer rights and promoting transparency in healthcare billing.

## Patient Protections and Provisions

The No Surprises Act offers comprehensive protections to patients against unexpected medical bills. These measures primarily safeguard patients during emergency situations, ensure fair cost-sharing, and prevent expensive out-of-pocket charges from out-of-network providers.

### Emergency Services Requirements

Under the No Surprises Act, patients are guaranteed coverage for emergency services without the need for prior authorization. This coverage applies regardless of whether the healthcare provider or facility is in-network or out-of-network. These services must be treated on an in-network basis without additional limits on coverage.

### In-Network Cost Sharing

Cost-sharing for patients, such as deductibles and coinsurance, must be based on in-network rates. The Act mandates that even if the patient receives care from an out-of-network provider, their cost-sharing obligations should not exceed what they would have paid if the services were provided by an in-network provider.

### Out-Of-Network Charge Limitations

There are strict limitations on the amount that out-of-network providers can charge for care. The recognized amount is usually the lower of the billed amount or the Qualifying Payment Amount (QPA), which is determined by the plan’s established in-network rate.

### Balance Billing Restrictions

Balance billing refers to the practice where providers bill patients for the remaining balance after the insurance has paid its portion. The No Surprises Act prohibits high out-of-network balance billing for emergency services and certain non-emergency services at in-network facilities, effectively shielding patients from unexpected expenses.

## Provider and Facility Responsibilities

Providers and facilities have specific obligations under the No Surprises Act, designed to shield patients from unexpected healthcare bills. These responsibilities center on clearly communicating costs through Good Faith Estimates and engaging in the Billing Dispute Resolution Process when necessary.

### Good Faith Estimates

Under the No Surprises Act, providers and facilities are required to furnish patients with Good Faith Estimates for services when scheduling care or upon request. This estimate must include anticipated charges for the primary service as well as any additional services that may reasonably be expected in conjunction with it. The objective is to present a comprehensive view of potential costs, so patients can make informed financial decisions regarding their healthcare.

### Billing Dispute Resolution Process

When billing disputes arise, providers and facilities must adhere to the Billing Dispute Resolution Process established by the No Surprises Act. This process aims to reach agreeable terms for payment between healthcare entities and payers. It involves:

- Notification: Alerting the payer about a payment denial or an initial payment that is disputed.
- Negotiation: Entering a 30-day negotiation period to attempt to settle the disputed claim.
- Independent Dispute Resolution (IDR): If negotiations fail, an independent third party steps in to determine the appropriate amount to be paid.

These structured steps are designed to expediently resolve disputes while minimizing patient involvement in the financial discord.

## Implementation and Enforcement

The No Surprises Act, designed to shield consumers from unexpected medical costs often arising from out-of-network services, undergoes rigorous implementation and enforcement. Federal agencies are tasked with enforcing the Act, while healthcare providers and insurers must navigate new reporting requirements.

### Regulatory Oversight

The Department of Health and Human Services (HHS), alongside the Departments of Labor and the Treasury, executes enforcement responsibilities for the No Surprises Act. These agencies ensure compliance through guidance, rulemaking, and oversight activities. To aid in enforcement, HHS established a national complaints system to manage consumer reports of violations. Moreover, the Federal IDR portal reopened on December 15, 2023, to address disputes under the Act, reaffirming the departments’ commitment to active oversight.

### Reporting Requirements

Healthcare providers and insurers must abide by certain reporting requirements under the No Surprises Act. These requirements include detailed documentation of out-of-network charges and payments. Additionally, there is an imperative to report on air ambulance services, which has been historically opaque, as outlined in the Air Ambulance NPRM – Fact Sheet. Compliance with these reporting directives is essential for transparency and the prevention of surprise medical billing.

## Frequently Asked Questions – No Surprise Billing Act

The No Surprises Act is a significant piece of legislation aimed at protecting consumers from unexpected medical bills for out-of-network services. This section addresses some common inquiries regarding its scope, requirements, and consumer protections.

### What protections does the No Surprises Act provide for patients?

The No Surprises Act establishes federal protections against balance billing for emergency services and certain non-emergency services provided by out-of-network providers at in-network facilities. Patients are only responsible for the in-network cost-sharing amounts.

### Who is affected by the No Surprises Act and which entities must comply?

Both patients receiving healthcare services and providers—including hospitals, doctors, and air ambulance services—must comply with the No Surprises Act. The regulations impact insurance carriers and healthcare providers across the United States.

### What are the primary components of the No Surprises Act regulations?

The regulations under the No Surprises Act include the requirement for providers to furnish a good faith estimate of charges to uninsured or self-pay patients, the prohibition of balance billing in many emergency and non-emergency scenarios, and the establishment of a dispute resolution process for providers and insurers.

### How does the No Surprises Act address out-of-network billing?

The Act protects patients from out-of-network charges by limiting what they can be billed for out-of-network services to the amount they would have paid if such services were provided in-network. Providers must negotiate reimbursement with insurers through an independent dispute resolution process when necessary.

### What steps should consumers take if they believe they have received a surprise medical bill?

Consumers should first review their medical bills and explanation of benefits (EOB) to confirm if charges are unexpected. If an illegitimate surprise bill is suspected, they should contact their provider or insurer. They also have the right to initiate a dispute through the Consumer Complaint and Appeals process set forth by the No Surprises Act.

### In what ways do state surprise billing laws interact with the No Surprises Act?

State surprise billing laws continue to apply if they are more protective than the federal No Surprises Act. The federal law acts as a baseline protection, and if a state does not have a relevant law or its law is less protective, the federal No Surprises Act provisions will take precedence, ensuring consumers are shielded against surprise billing.

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