After much debate and media attention, then President Trump signed the Consolidated Appropriations Act, 2020 (CAA) into law; however, specific regulatory elements are yet to be determined and may be subject to change under the new Administration. Most of the “stimulus bill” centers around its $900 billion in coronavirus relief components. However, it also includes overshadowed provisions applicable to employee benefit plans. One provision that will apply to all health insurance plans beginning in 2022 is the No Surprises Act. This law will, essentially, prohibit unexpected “surprise” medical balances/bills from out-of-network providers. This is welcome news for healthcare consumers who have been powerless to control scenarios resulting in hefty, unplanned, out-of-pocket expenses billed by out-of-network providers for services in which the member has no say in the provider’s involvement of the care rendered.
For decades, these surprises have been systematically inherent to health coverage based on a preferred network of providers. An individual’s “in-network” benefits tend to cost less out-of-pocket to incentivize the use of providers under contract by the health insurance carrier (or contracted by a self-funded health plan). Another benefit of choosing contracted providers is the assurance that expenses beyond the usual, reasonable and customary amounts will not be incurred by a covered member due to the terms of the provider’s contract as a “preferred” provider.
Detailed regulations are expected by July 1, 2021, from the U.S. Department of Health and Human Services (HHS) and the U.S. Department of Labor (DOL) with required compliance as of new policy years beginning on or after January 1, 2022. Although the regulation-making process is yet to happen and often considers external input, employers should begin to assess how the law may impact health plans and their employees/covered members.
Specifically, the No Surprises Act will apply to doctors, hospitals and air ambulance (curiously, ground ambulance providers are not subject to the new law) providers. In most cases, these providers will no longer be able to balance bill members. Instead, they will be required to negotiate with the insurance carrier or plan sponsor using new guidelines and methodologies to come to an agreement on payment. There is even an arbitration requirement in situations where good faith negotiating does not result in an agreement. This will happen behind-the-scenes and without the burden or hassle of billing office and collection agency calls. In the end, a patient/member can only be held responsible for amounts that would apply as if the provider(s) in question were in-network (under contract).
The law applies the same to both emergency and non-emergency care. Additionally, there is no minimum service cost that needs to be in dispute to trigger the negotiation requirement. Some examples of common scenarios that will be subject to the Act include:
- Receiving planned care at a network facility, but unknowingly being seen/treated by a non-network doctor
- Scheduling a surgical procedure at a network facility with a network surgeon, but having ancillary services provided by a pathologist, radiologist or anesthesiologist that are not in-network
- Emergency room visits and services where a person is not in a state of condition to give any directive on the trip, place of care, etc.
For non-emergency care not rendered by ancillary providers, there are some exceptions to the prohibition on balance billing. This is contingent on the provider following stringent notice and consent guidelines established in the law. In brief, a provider will be required to provide a notice to the patient no later than 72 hours before the scheduled date of service. The notice must include: that the provider is not in the health plans network; an estimate of the balance the patient might be charged for the service(s) expected to be rendered; notification if pre-certification is required by the health plan; and, finally, if the service to be provided is going to be at an in-network facility, the non-network provider giving the notice must include a list of in-network providers that could provide the same scheduled service(s). The patient then may consent by signing. If so, the non-network provider may balance the bill.
Also included in the law is a new requirement that providers distribute a one-page notice to patients detailing the main provisions of the No Surprises Act and how to report potential violations to authorities. It can be assumed that a template will be included with the regulations due in July. The law will also require ID cards to include both deductible and out-of-pocket amounts.
Overall, the No Surprises Act is a big victory for healthcare consumers. It may be the first of many more to come as Congress finds common ground in legislative efforts to force greater patient protections, transparency and cost control measures in healthcare and pharmaceuticals. Contact a Johnson Financial Group advisor today if you have questions or would like to learn more about the No Surprises Act.