New Federal Rule on “Surprise Medical Bills”
New Federal Rule on “Surprise Medical Bills”
On July 1, 2021, the US Department of Health and Human Services (HHS,) Labor and Treasury and the office of Personnel Management, issued “Requirements related to Surprise Billing; Part 1,” an interim final rule restricting “Excessive” out of pocket cost to consumers. This interim final rule will undergo 60 days of public comment and will go into effect for health care providers and facilities January 1, 2022.
It has sometimes been the practice of providers to bill the patient the remainder of what their insurance company does not pay. This “balance billing” is currently prohibited in both Medicare and Medicaid and has been prohibited for certain health care providers under the California Knox-Keene Health Care Service Plan Act of 1975, as amended. It will now extend protection to consumers through employer-sponsored and commercial health plans.
The Biden-Harris Administration has been working with the HHS to ensure transparency and affordable care without the consumer being saddled with unexpected costs.
Here are a few of the provisions in the interim final 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.
According to the HHS, these provisions will provide patients with financial peace of mind while seeking emergency care, as well as safeguard them from unknowingly accepting out-of-network care and incurring surprise billing expenses. This rule will ban out-of-network charges without advance notice.
The cost of care in the United States has exploded and has caused financial ruin to many Americans whose only alternative in many circumstances was to seek Bankruptcy protection. This interim final rule implements the first of several requirements passed with bipartisan support in title 1 (the “No Surprises Act”) of division BB of Consolidated Appropriations Act, 2021, enacted in the hopes of protecting Americans from exorbitant unexpected medical bills. It was a contentious legislative fight over the No Surprises Act. The American Medical Association and some conservative groups such as Action for Health, were concerned that the bill would lead to dangerous, unintended consequences, right in the middle of a pandemic. The American Hospital Association agreed with the new rule that allows for an independent dispute resolution, but they are worried it could financially hurt small medical practices and create a financial windfall for insurers.
Beyond requirements in the No Surprises Act, the federal government has broad general authority to require reporting on surprise medical bill claims under ACA transparency reporting provisions. Several states, like California, have created their own billing protections in recent years, but they are more limited in their reach. The federal rules will pertain to all types of coverage: large group plans obtained through employers, health benefits through self-insured companies, small-group plans, individual insurance such as health plans sold through ACA marketplaces and plans for federal employees.
The “No Surprises Act” is a surprising example of bipartisanship and legislative momentum that builds in an unsystematic way. Physician groups that previously depended on out-of-network billing will have to adapt to the new competitive reality in 2022 when the No Surprises Act takes effect, but for patients it will be an empowering reform that promises transparency and fairness.
For more information on the new “NO Surprises Act” go to www.HHS.gov. Here at Epps & Coulson, LLP, we understand that these updated changes may be confusing. To ensure that you understand the “No Surprises Act Rule” contact Dawn: firstname.lastname@example.org.
Information contained in this Memo is intended for informational and educational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney. It is considered advertising under laws of some states. Epps & Coulson, LLP encourages you to call in order to discuss these matters as they apply to you or your business.
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