Practice Management Alert

Don’t miss the opportunity to learn what’s in the No Surprises Act.

Not to put too fine a point on it, but clinicians with ties to hospitals may be surprised with some provisions of the late December 2020 government funding bill, which included the No Surprises Act. The legislation is intended to address surprise billing, or balance bills.

Protecting patients from balance bills is paramount, says Richard J. Pollack, CEO of the American Hospital Association (AHA), in a letter to Congressmen Richard E. Neal and Kevin Brady on the Ways and Means Committee.

Define Surprise or Balance Billing

Balance billing, also known as surprise billing, generally occurs when a patient receives care expecting an in-network rate or by in-network clinicians, but the facility or doctor was actually out of network. The provider then bills the patient directly, leading to a bill higher than the patient anticipated due to the misunderstanding about in-network status.

Though this most frequently happens in emergencies, receiving care from a physician who’s out of the patient’s health plan’s network can also lead to balance bills. The national media sometimes picks up stories about patients who receive astronomical, unanticipated bills for care they believed that their health insurance would cover.

Understand These Details

With this legislation, which goes into effect in 2022, the specifics still need to be hashed out by the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury. The requirements are set forth in the legislation, but the means of implementation have not yet been devised or announced.

The spirit of the No Surprises Act is meant to ensure that patients don’t have to pay more than the in-network rates their insurers and providers negotiated: patients won’t bear the responsibility of costs beyond their in-network rate, and some credit of whatever they are expected to pay goes toward their in-network deductible or out-of-pocket maximum, according to Hall Render attorneys Amy Mackin, Angela Smith, Abby Kaericher, and Lisa Lucido in online analysis.

Payers will be required to make a payment within 30 days at an out-of-network rate directly to providers. If the state has a mandated amount for an out-of-network rate, that amount applies; otherwise the rate is either mutually decided, determined through an independent dispute resolution (IDR) process, or approved by the respective state under an All-Payer Model Agreement (APMA), Hall Render says.

Put Negotiation on Your List

If direct negotiation between parties doesn’t resolve any payment issues, the IDR process will be available. The specifics of the IDR process has not yet been developed, but each party will be able to propose a payment amount to a third-party entity certified by the departments of Health and Human Services, Labor, and the Treasury, respectively, that will serve as arbiter. The arbiter will choose one of the payment amounts based on criteria some experts are calling fair to both patients and providers.

One major win: The arbiter cannot consider the frequently lower rates for Medicare or Medicaid, but with the caveat that they also cannot consider “‘usual and customary’ charges or billed charges,” the Hall Render attorneys note. Other criteria comes into play instead, including the already established negotiated in-network rate for the same service or item, the provider’s training and qualifications, any prior contractual history between the parties, the complexity of the services, and any other information that either party submits, including each party’s market share, they note.

The payer is responsible for paying the claim within 30 days of the arbiter’s decision.

Know Your Responsibilities for Patient Notification

While the details are still being hammered out, now is a good time to evaluate your current relationships with payers and determine if the new legislation affects whether you want to be in network or out of network with each particular payer.

Since providers will need to notify patients if and when an item or service may be out of network, Hall Render also recommends that providers adjust their revenue cycle operations so they can more easily provide notice to patients for out-of-network situations.