No Surprise Act
On December 27, 2020, Congress enacted the No Surprise Act (the “Act”) as part of the $900 billion omnibus spending bill. Effective January 1, 2022, the Act provides long-anticipated statutory protections for consumers against unexpected medical bills, commonly referred to as “balance billing.” Balance billing most commonly occurs when a patient visits an in-network facility for health care services and receives services and an unexpected medical bill from an out-of-network provider. The Act contains key provisions that prohibit providers, facilities and health insurance companies from holding patients liable for emergency services and certain non-emergency services beyond the patient’s in-network cost-sharing amount.
Responsibility of Health Care Providers and Facilities
Among other provisions, the Act prohibits out-of-network providers and facilities from billing insured patients for emergency services beyond cost-sharing amounts that would apply if the services were performed by an in-network provider or facility. The Act further prohibits out-of-network providers at in-network facilities from billing patients for non-emergency out-of-network services beyond the patients’ in-network cost-sharing amounts, unless each of the following is met: (1) the bill is not for ancillary services, as defined by the Act; (2) the patient gives informed consent upon verbal and written or electronic notice at least 72 hours prior to the services (or on the day the services are arranged, if arranged within 72 hours); and (3) the patient signs the consent notice and is provided a copy. The notice must clearly state the following:
- That the provider/facility is out-of-network;
- That consent for the out-of-network services by the patient is optional and that the patient may receive the services from an in-network provider/facility, in such case the patient’s payment obligation would not exceed the applicable in-network costs-sharing amounts;
- A good faith estimate of the total costs for the out-of-network services;
- If an out-of-network provider at an in-network facility, a list of in-network providers at the facility who can provide the items/services; and
- Information about whether prior authorization or other care management limitations may be required in advance of receiving such items or services.
The Act expressly excludes from the notice exception services provided by an out-of-network provider when : (1) there are no in-network providers available at the facility; (2) the services are the result of unforeseen, urgent medical needs that arise after the patient consents to the out-of-network non-emergency services; or (3) the out-of-network provider is an ancillary provider, such as a radiologist, anesthesiologist, pathologist, neonatologist or such other specialty provider as may be determined by the United States Department of Health and Human Services (“HHS”). Out-of-network providers and facilities must also provide certain notices and disclosures to inform patients of the Act’s requirements, including:
- Public disclosures of: (1) the Act’s prohibition on billing patient’s in excess of the patient’s cost-sharing amount, as applicable; (2) state law requirements applicable to balance billing; and (3) contact information for state and federal agencies for patients to report violations of the Act and applicable state laws against balance billing;
- Advance notice of good faith estimates for scheduled out-of-network services;
- Regular updates to health insurance companies of the facility’s provider directory
Responsibility of Health Plans
The Act also prohibits health insurance companies from imposing greater cost-sharing amounts on patients for out-of-network emergency, and certain non-emergency, services than would otherwise be imposed if the patient received the services by an in-network provider/facility and requires health insurance companies to count such cost-sharing amounts towards the patient’s in-network deductible or maximum out-of-pocket expense. Specifically, the Act provides that if a health insurance company provides any benefits to the patient with respect to services rendered in an emergency department (“ED”), including a hospital ED, a freestanding ED, or a hospital outpatient department that provides emergency services, with respect to services provided in the ED, the plan must cover items or services for which benefits are provided that are rendered by an out-of-network provider or out-of-network facility. Among the items and services required to be covered by health plans include certain items and services provided after the patient has been stabilized as well as items or services provided as part of outpatient observation or an inpatient or outpatient stay with respect to the ED visit, unless: (1) the out-of-network provider determines that the patient is able to travel using non-medical or non-emergency medical transportation; and (2) the out-of-network provider satisfies the notice/informed consent requirements provided above. The Act also allows for additional conditions as may be determined by HHS.
The Act also provides for a negotiation and independent dispute resolution (“IDR”) process for health plans and out-of-network providers and facilities that disagree about payment rates for out-of-network services and instructs HHS to establish an IDR process under which an uninsured patient who is billed in excess of a good faith estimate for scheduled services may challenge the charges.
State Law Prohibitions
Many states have enacted their own prohibitions on balance billing, which the Act permits to be more restrictive than federal law.
In Tennessee, Tenn. Code Ann. § 56-7-120 permits an insurance company to refuse payment to an out-of-network facility-based physician for services performed in an in-network facility if the facility-based physician does not provide the patient written notice prior to the services, which must be signed by the patient. Moreover, Tenn. Code Ann. § 68-11-243 prohibits a health care facility from collecting out-of-network charges from a patient or an insurance company, unless the patient is provided prior written notice. To comply with the statutes, the advance written notice must include the following:
- A statement that the patient may receive services by a facility-based physician who may be out-of-network;
- A statement that the patient agrees to receive services by the out-of-network physician and agrees to be responsible for 100% of the billed charges;
- For scheduled services, the estimated amount or range of estimates that the facility will charge for the out-of-network services;
- A listing of anesthesiologists, radiologists, emergency room physicians, and pathologists or the groups of such providers with which the facility has contracted; and
- A statement that certain facility-based providers may be out-of-network, may not be employed by the facility, and may bill separately.
Mississippi has also enacted legislation effectively outlawing certain balance billing practices. Miss. Code Ann. § 83-9-5(1)(i) provides that if the patient assigns payment of any health insurance benefits to a provider through a written direction, any payments made by the health insurance company to the provider must be considered payment in full to the provider, and the provider may not bill or collect from the patient any amount above the insurance payment, other than the patient’s applicable deductible, coinsurance, copayment or other charges for non-covered services.