Understanding Insurance Billing Compliance: Exploring Potential Pitfalls And Penalties

is there a penalty for not billing insurance services performed

The No Surprises Act (NSA) protects people from surprise billing for emergency services if they have a group health plan or group or individual health insurance coverage. It limits the amount of out-of-network cost-sharing, like out-of-network coinsurance or copayments, for all emergency and some non-emergency services. It also limits out-of-network charges and balance bills for supplemental care, like radiology or anesthesiology, by out-of-network providers that work at an in-network facility. The Act also requires some health care facilities and providers to disclose Federal and State patient protections against balance billing and sets forth complaint processes with respect to violations of the protections against balance billing and out-of-network cost-sharing.

Characteristics Values
Is there a penalty for not billing insurance for services performed? No penalty for not billing insurance, but there may be a penalty for the patient if they are balance billed.
What is balance billing? When a health care provider bills a patient after the patient's health insurance company has paid its portion. The patient pays the difference between the amount the provider charges and the price the insurance company sets.
When does balance billing occur? When a consumer receives healthcare services from an out-of-network provider or an out-of-network facility.
What is the No Surprises Act? A federal law that protects people from unexpected out-of-network medical bills.
When did the No Surprises Act come into effect? January 1, 2022

shunins

The No Surprises Act protects against unexpected out-of-network medical bills

The No Surprises Act (NSA) is a federal law that came into effect on January 1, 2022, to protect people from unexpected out-of-network medical bills. The Act applies to most types of health insurance and offers protection in the following scenarios:

  • Emergency room visits
  • Non-emergency care related to a visit to an in-network hospital, hospital outpatient department, or ambulatory surgical center
  • Air ambulance services

Under the NSA, out-of-network providers cannot send patients surprise balance bills for emergency treatment or for out-of-network care provided at an in-network hospital. Instead, patients can only be charged their regular in-network cost-sharing amounts.

The NSA also establishes an independent dispute resolution process for payment disputes between insurance plans and providers. Additionally, it provides new dispute resolution opportunities for uninsured and self-pay individuals when they receive a medical bill that is significantly higher than the good faith estimate they receive from the provider.

It's important to note that the NSA does not apply to ground ambulance services, which are a significant source of surprise balance billing. However, a committee has been formed to study ground ambulance charges, and future legislation may address consumer protections in this area.

The NSA also doesn't apply if a patient chooses to use an out-of-network provider in a non-emergency situation. In such cases, balance billing can still occur, and the health plan's normal rules for out-of-network coverage would apply.

In limited non-emergency situations, out-of-network medical providers can ask patients to waive their rights under the NSA. If the patient agrees, they may still receive a balance bill from the out-of-network provider, who can refuse to provide treatment if the patient doesn't waive their balance billing protections. However, waivers are not allowed in most scenarios that generate surprise balance billing, including emergency care, ancillary services, and certain other specified situations.

shunins

Balance billing is prohibited in Medicare and Medicaid

Balance billing is a practice in which doctors or other healthcare providers bill patients for charges that exceed the amount reimbursed by Medicare or Medicaid for a particular service. This occurs when the doctor sends the patient a bill for more than the normal deductible and coinsurance out-of-pocket costs, essentially trying to recoup the portion of the bill written off by Medicare or Medicaid.

Balance billing is prohibited in both Medicare and Medicaid. If your doctor is a participating provider with Original Medicare, balance billing is forbidden. Similarly, if you have Medicare and are a Qualified Medicare Beneficiary (QMB), you are protected by federal law from balance billing by a Medicare-enrolled provider for amounts above what Medicare paid.

In the case of Medicaid, a doctor or hospital that accepts Medicaid is prohibited from balance billing you for services that Medicaid covers. This means that the provider cannot charge you more than what Medicaid paid, unless you make a private written agreement to pay more or you were informed that Medicaid does not cover the service and you agreed to pay out of pocket.

shunins

The federal individual mandate penalty was eliminated in 2018

The federal individual mandate penalty was eliminated at the end of 2018. This means that, as of 2019, there is no longer a federal penalty for non-compliance with the individual mandate, which requires most Americans to maintain health insurance coverage. However, the individual mandate itself still exists, and some states have implemented their own mandates and penalties.

The elimination of the federal penalty was a result of the Tax Cuts and Jobs Act, passed by Congress and signed into law by President Trump in December 2017. While the individual mandate penalty was repealed as of 2019, other provisions of the tax bill took effect in 2018. The elimination of the penalty was expected to result in millions more Americans going without health insurance and increases in premiums for most individual market plans.

The individual mandate penalty was a key component of the Affordable Care Act (ACA), also known as Obamacare. The mandate was designed to ensure that healthy people would remain in the risk pool, helping to keep premiums lower. Without the penalty, it is possible that only older and sicker individuals will enroll in health insurance, which could lead to further increases in premiums.

Following the elimination of the federal penalty, some states have implemented their own individual mandates and associated penalties. As of 2024, there are financial penalties for being uninsured in Massachusetts, New Jersey, California, Rhode Island, and the District of Columbia. Vermont has an individual mandate but does not impose a penalty for non-compliance.

shunins

Some states have penalties for being uninsured

While there is no longer a federal penalty for being uninsured, some states have implemented their own health coverage requirements, with penalties for residents who don't maintain coverage. These include:

  • Massachusetts
  • New Jersey
  • California
  • Rhode Island
  • Washington, DC

Vermont has also enacted a mandate that took effect in 2020, but there is no penalty for non-compliance.

shunins

The No Surprises Act outlines a dispute resolution process

The No Surprises Act (NSA) is a federal law that came into effect on January 1, 2022, and protects people from unexpected out-of-network medical bills. It applies to most types of health insurance and covers emergency room visits, non-emergency care related to a visit to an in-network facility, and air ambulance services.

The NSA outlines a dispute resolution process called the Federal Independent Dispute Resolution (IDR) process. This process is a last resort for payment disputes between providers and health plans, and it works as follows:

  • After a provider files a claim, the health plan has 30 days to make an initial determination on whether and how to cover the claim.
  • Once the claim is filed, the health plan has 30 days to decide whether to pay, deny, or adjust the claim. There may be extensions in certain circumstances, such as if the plan requests additional information.
  • On the date the health plan processes the claim, it calculates the applicable in-network cost-sharing amount based on the qualifying payment amount (QPA), which is the median in-network contracted rate by the health plan issuer in the same insurance market and region for the item or service.
  • The plan then informs the out-of-network provider of the patient's responsibility and issues an explanation of benefits (EOB) to the patient, showing the applicable in-network cost-sharing amount the patient owes the provider.
  • After the plan determination, the plan or provider can initiate open negotiations on the payment. Parties must complete 30 business days (or about 42 calendar days) of open negotiations before entering the federal IDR process.
  • If the parties cannot reach an agreement, either party can initiate the federal IDR process within 4 business days of the end of open negotiations.
  • Parties then have 10 business days to select a certified IDR entity and submit offers of payment. IDR entities are third-party organizations certified by the federal government to arbitrate payment amounts.
  • The selected IDR entity has 30 business days to pick one of the two offers, considering the QPA and additional supporting materials. Additional materials can include the provider's quality, market share, and complexity of the population served.
  • Once the IDR entity selects an offer, the health plan has 30 calendar days to make any additional payments. The entire process, from claim determination to any additional payment, can take over 6 months.

The federal IDR process applies to all self-insured group plans, which represent 65% of workers with employer-based coverage as of 2021. It also applies to fully-insured plans in states with no surprise billing protections. In states with some protections, a state process will apply for fully-insured plans, and the federal process will apply where the surprise bill is not covered under state law.

Frequently asked questions

A surprise medical bill is an unexpected bill from an out-of-network provider or facility. This could be for a service like anesthesiology or laboratory tests.

The No Surprises Act is a federal law that protects people from surprise medical bills. It came into effect on January 1, 2022, and applies to most types of health insurance.

The No Surprises Act protects you from surprise billing for emergency services if you have group health insurance, and limits the amount of out-of-network cost-sharing for emergency and some non-emergency services.

If you receive a surprise bill, you can appeal that decision. Your plan documents will contain information on the review process and how to request a review of your plan's decision.

Balance billing occurs when a healthcare provider bills a patient after their insurance company has paid its portion. The patient is then billed for the remaining amount.

Written by
Reviewed by
Share this post
Print
Did this article help you?

Leave a comment