The “No Surprises Act,” the most comprehensive federal legislation enacted to date designed to prohibit surprise medical bills, is part of the recently enacted Consolidated Appropriations Act of 2021.
The new law prohibits insurers and providers from “balance billing” consumers – billing consumers costs in excess of their in-network rates in specific circumstances, including:
- Emergency services, even when care is delivered by a non-participating provider or at a non-participating emergency facility;
- Services rendered after a patient is stabilized, but are part of a stay or observation related to the emergency incident; (This applies unless the patient is able to travel using non-medical transport, or appropriate notice and consent is given to and from the patient. The Secretary of the US Department of Health and Human Services (HHS) may set additional parameters through regulation.)
- Non-emergency services delivered at a participating facility; (Unless appropriate notice and consent is given except in the case of certain medical circumstances, including delivery of emergency care, anesthesiology, pathology, radiology, neonatology, or urgent or unforeseen medical needs.)
- Air ambulance services delivered by a non-participating service;
- Services received at an out-of-network facility because of inaccurate information about network status furnished by an insurer; and
- Care that is continuing beyond the period in which the relationship between a provider/facility and insurer has been terminated, unless appropriate notice and consent is given to and from the patient.
- Holds consumers harmless from liability for any costs, other than cost sharing that would have been charged if services were delivered by an in-network provider or at an in-network facility;
- Requires that any required cost-sharing count toward the enrollee’s in-network deductibles or out-of-pocket maximums;
- Prohibits the need for prior authorizations in the case of emergency care and for females seeking gynecological/ obstetric services;
- Allows uninsured individuals to dispute charges “substantially in excess” of any estimated charges the individual received regarding the services rendered; and
- Mandates that consumers be allowed to designate any available primary care provider who is available to accept them as their provider or as their primary care physician (PCP), including a pediatrician (applies in the case where PCP selection is required by the conditions of the plan).
To Whom Does the New Law Apply?
Covered insurers: The law applies to all individual and group health plans, including self-insured plans, for coverage effective on or after Jan. 1, 2022.
Covered providers/services: The law extends across all providers including a physician or other health care provider who is acting within the scope of practice of that provider’s license or certification under applicable state law. It also extends to emergency facilities that include a hospital emergency department or an independent free-standing emergency department. Protections also apply to air ambulance services and include medical transport conducted by helicopter or airplane for patients.
Process for Resolution of Payments
HHS, in coordination with the labor and treasury departments, will develop a resolution process for payment disputes between insurers/health plans and providers. In general, the process will work as follows:
- The insurer or plan must submit an initial payment or denial no later than 30 days after receipt of the bill from the provider.
- Within 30 days of payment or denial, provider or issuer may initiate a 30-day negotiation period.
- If payment is not resolved within four days following the negotiation period, the parties may initiate arbitration via independent dispute resolution (IDR).
- IDR will be conducted via “baseball arbitration” whereby the IDR entity will select either the provider or the insurer’s submitted rate as final.
- Either providers/facilities, insurers, or both may be liable for costs associated with arbitration depending on final outcome of the IDR process.
Additional details about the dispute resolution process are pending, including how IDR entities will be certified and rules related to how appropriate payment amounts may be determined. The federal law gives deference to states that have already established their own processes for setting or evaluating reimbursements, including New York and New Jersey that have established similar dispute resolutions processes, but includes specific parameters on factors that arbiters must consider when determining costs. Future federal guidance on reimbursements may account for:
- Geography, including whether services were conducted in rural or underserved communities;
- Insurers’ median in-network rates;
- Non-fee-for-service charges;
- Quality metrics;
- Facility type; and
- Qualifying payment amounts, based on the median of contracted rates recognized by the plan or insure.
In the case of air ambulance services, IDR may not consider usual and customary charges, including payment rates in Medicare, Medicaid, CHIP, or TRICARE. Additional factors that may be considered include acuity of patient/case, training and experience of medical personnel, vehicle type, population density of pick-up site, and good faith efforts on the part of the provider to contract with the health plan.
Notice and Transparency Requirements
The law includes several new requirements placed on both providers and insurers to improve cost and network transparency. These include:
For providers/ facilities:
- Clear consent form services that may be delivered by an out-of-network provider (such as by a provider contracted with a facility, but not included in the facility’s network). Notice must be available 72 hours in advance of services, be in the 15 most common languages in that geographic area, and include a list of in-network providers at the facility that may be able to perform the service.
- A one-page notice describing their balance billing policies, applicable laws, and the contact information for state and federal agencies to report any violations.
- Requirement that they provide good-faith estimates of the cost of services.
- Requirement that they submit timely updates to insurers relevant to provider directories, including upon termination of relationships or other material changes.
Insurers must provide:
- Clear information on all insurance ID cards regarding deductibles, out-of-pocket maximums, and consumer assistance telephone numbers and websites;
- Timely notice about network status of providers or facilities, good-faith estimates of costs and contracted rates of services for in-network care, or information on how to obtain those rates for out-of-network services;
- Price comparison tools and guidance including phone services and an online web tool; and
- Verification of provider directory information once every 90-days.
Deference to Existing State Laws
Federal law gives little deference to states and in many cases it may supersede or possibly enhance existing states’ laws, such as by adding new circumstances under which patients would be protected from balance bills. The law does not prohibit states from enacting and enforcing more restrictive protections. The law does give explicit deference to state law where states have an established process for cost or rate calculation related to arbitration or payment amounts
The law gives states the authority to enforce provisions of the federal law. Federal agencies will conduct enforcement when states do not conduct substantial enforcement, additional details describing how this will work will emerge with future rulemaking. The federal government may issue penalties of up to $10,000 for providers and facilities in violation of these provisions. HHS will also establish mechanisms by which consumers and states can issue complaints or violation alerts.
Investments in State All-Payer Claims Databases (APCDs)
The law makes $2.5 million grants available to states for the purposes of creating or improving APCDs. States that seek multi-state APCD arrangements, or that prioritize implementation of a to-be-developed standard format for data reporting for self-insured plans may receive priority application consideration.
The No Surprises Act will have significant impact on states, insurers, providers, and consumers, but many details that will dictate the full impact of the law have not yet emerged. As new information emerges through regulations and guidance, NASHP will continue to work with states on ways to effectively implement and coordinate the law with existing state laws.