The Surprise Bill Law: Unraveling The Insurance Coverage

Surprise medical bills are unexpected bills from an out-of-network provider or facility. They can occur when patients receive emergency or non-emergency care. Before the No Surprises Act, if you had health insurance and received care from an out-of-network provider or facility, your health plan may not have covered the entire out-of-network cost. This could result in higher costs for the patient. The No Surprises Act, which came into effect on January 1, 2022, protects consumers from surprise medical bills by banning them for most emergency services and some non-emergency services, prohibiting out-of-network cost-sharing, and requiring providers to give good faith estimates of costs for non-emergency care. The Act also establishes an independent dispute resolution process for payment disputes.

The No Surprises Act protects people with private health insurance from surprise medical bills

Surprise medical bills are unexpected bills from an out-of-network provider or facility. They occur when patients receive care from an out-of-network provider or facility, even unknowingly. Before the No Surprises Act, if patients had health insurance and received care from an out-of-network provider or facility, their health plan might not have covered the entire out-of-network cost. This could result in higher costs for the patient than if they had received care from an in-network provider or facility.

The No Surprises Act (NSA) protects people with private health insurance from surprise medical bills. It was signed into law in 2020 and most protections came into effect on January 1, 2022. The Act establishes new federal protections against surprise medical bills and applies to nearly all private health plans offered by employers, as well as non-group health insurance policies offered through and outside of the marketplace.

The NSA protects people with private health insurance from surprise medical bills in the following ways:

• It bans surprise billing in private insurance for most emergency care and many instances of non-emergency care.
• It requires that uninsured and self-pay patients receive key information, including overviews of anticipated costs and details about their rights.
• It bans surprise bills for most emergency services, even if patients get them out-of-network and without approval beforehand (prior authorization).
• It bans out-of-network cost-sharing (like out-of-network coinsurance or copayments) for most emergency and some non-emergency services. Patients can't be charged more than in-network cost-sharing for these services.
• It bans out-of-network charges and balance bills for certain additional services (like anesthesiology or radiology) furnished by out-of-network providers as part of a patient’s visit to an in-network facility.
• It requires that health care providers and facilities give patients an easy-to-understand notice explaining the applicable billing protections, who to contact if they have concerns that a provider or facility has violated the protections, and that patient consent is required to waive billing protections.

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

The Act also protects uninsured and self-pay individuals

The No Surprises Act (NSA) provides protections for uninsured and self-pay individuals. Starting in 2022, uninsured and self-pay individuals are protected from surprise medical bills. Under the NSA, uninsured and self-pay individuals are entitled to a "good faith estimate" of the costs of their care before receiving non-emergency treatment. This estimate must include expected charges for the primary item or service, as well as any other items or services that would reasonably be expected. For example, for a surgery, the estimate would include the cost of the surgery, as well as any labs, other tests, and anesthesia that might be used during the procedure.

Uninsured and self-pay individuals are also protected from being overcharged for their care. If the final bill exceeds the good faith estimate by $400 or more, they can dispute the final charges. The dispute process involves a third-party arbitrator who reviews the good faith estimate, the final bill, and any other submitted information to determine the final payment amount.

Uninsured and self-pay individuals are also protected by the NSA's requirement that health care providers and facilities give patients easy-to-understand notices that explain the applicable billing protections and who to contact if the patient believes the provider or facility has violated the new surprise billing protections.

In addition to the protections provided by the NSA, uninsured and self-pay individuals may already be protected against surprise medical billing if they have coverage through Medicare, Medicaid, Indian Health Services, Veterans Affairs Health Care, or TRICARE.

People with Medicare and Medicaid are already protected from surprise billing

Surprise medical bills are unexpected bills from an out-of-network provider or facility. They often occur after an accident or sudden illness, and consumers are rarely informed of the costs of medical treatment before receiving emergency treatment. Before the No Surprises Act, if you had health insurance and received care from an out-of-network provider or facility, your health plan may not have covered the entire out-of-network cost. This could have left you with higher costs than if you had received care from an in-network provider or facility. This is known as "balance billing".

The No Surprises Act, which came into effect on January 1, 2022, protects people covered under group and individual health plans from receiving surprise medical bills. It also establishes an independent dispute resolution process for payment disputes between plans and providers.

The No Surprises Act also supplements state surprise billing laws; it does not supplant them. It creates a "floor" for consumer protections against surprise bills from out-of-network providers and related higher cost-sharing responsibility for patients.

The Act establishes an independent dispute resolution process for payment disputes

The No Surprises Act (NSA) establishes an independent dispute resolution process for payment disputes between plans and providers. This process is designed to protect consumers from surprise medical bills, which can arise when insured consumers inadvertently receive care from out-of-network hospitals, doctors, or other providers they did not choose. This typically occurs in about 1 in 5 emergency room visits and 16% of in-network hospitalizations for non-emergency care.

The IDR process is a third-party baseball-style arbitration process that determines the plan payment amount. It is established as a last resort if all other plan-provider negotiations fail. The process incentivizes both parties to make reasonable offers, as one of the two offers will be selected by the IDR entity. The losing party is then responsible for the IDR fees. This may encourage plans to avoid lowballing their offer amount and providers to avoid asking for high payment rates without strong justification.

The federal IDR process applies to all self-insured group plans and in states that do not have any surprise billing protections. In states with surprise billing protections, a state IDR process will apply for fully-insured plans. In states with only partial surprise billing protections, the federal process will apply where the surprise bill is not covered under state law.

The IDR process begins with the provider filing a claim. The plan then has 30 days to make an initial determination on whether and how to cover the claim. If the plan determines the claim is incomplete, they can request additional information. On the date the health plan processes the surprise bill claim, it calculates the applicable in-network cost-sharing amount based on the qualified 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.

After the initial determination, the plan or provider can initiate open negotiations on the payment. Parties must exhaust 30 business days (or about 42 calendar days) of open negotiations before entering the federal IDR process. If no agreement is reached, either party can initiate the federal IDR process within 4 business days following the end of open negotiations. Parties have 10 business days to select a certified IDR entity and submit offers of payment. The IDR entity then has 30 business days to select one of the two offers, considering the QPA and additional supporting materials. Once the IDR entity selects an offer, the health plan has 30 calendar days to make any additional payments. From the initial claim determination to the final payment determination can take over 6 months.

The No Surprises Act independent dispute resolution process encourages plans and providers to resolve payment disputes outside of the IDR arbitration process, while also protecting patients. However, early experience shows that the number of arbitrated disputes has been higher than expected. The federal IDR process has the potential to put downward pressure on prices, particularly among providers charging extremely high prices. The Congressional Budget Office (CBO) estimated a premium decrease of between 0.5% and 1% as a result of the Act.

The NSA also establishes new protections for uninsured and self-pay individuals. Starting in 2022, these individuals are entitled to receive a good faith estimate of costs before receiving non-emergency care. If the final bill exceeds the good faith estimate by $400 or more, they can dispute the final charges.

The Act requires health care providers to give patients an easy-to-understand notice of their rights

The No Surprises Act (NSA) is a federal law that came into effect on January 1, 2022, providing new protections against surprise medical bills. Under the Act, health care providers are required to give patients an easy-to-understand notice of their rights. This notice must explain the applicable billing protections, outline the process for disputing charges, and provide contact information for relevant enforcement agencies.

The Act protects people covered under group and individual health plans from surprise medical bills, which are unexpected bills from out-of-network providers or facilities. Surprise bills can arise during emergencies when patients have little to no say in where they receive care, or during non-emergencies when patients receive care from out-of-network providers at in-network facilities.

The easy-to-understand notice that patients receive under the Act must explain that they are protected from surprise billing in these situations. It must also outline the process for disputing charges if patients believe their rights have been violated. This process may involve appealing to the health plan, contacting a state Consumer Assistance Program (CAP), or filing a complaint with the Centers for Medicare & Medicaid Services No Surprises Help Desk.

Additionally, the notice must provide contact information for relevant enforcement agencies. This includes federal agencies such as the Department of Labor (DOL) and state agencies such as the attorney general, department of health, or medical licensing boards.

The No Surprises Act also establishes an independent dispute resolution process for payment disputes between plans and providers, and provides new dispute resolution opportunities for uninsured and self-pay individuals. These individuals have the right to receive a "good faith estimate" of costs before receiving non-emergency care and can dispute charges if their final bill exceeds the estimate by a certain amount.

Overall, the easy-to-understand notice that health care providers are required to give patients under the No Surprises Act helps to ensure that patients are aware of their rights and have the information they need to take action if those rights are violated.

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