While most of the 2022 No Surprise act is related to surprises patient’s receive in emergency care, some parts of the act apply to outpatient care. The emergency services situations include a fairly common situation like when a patient visits a local ER (for which hospital is in network) and receives treatment from ER Physicians that are in a group that is “out of network” for their insurance. Medical groups associated with Hospitals practice this approach to either enhance the revenue of the practice or as an approach to appropriately manage reimbursements from payers with low reimbursements. Patients were angered by some approaches that occurred since many felt they had no control over an emergency and most felt the approach was ‘unfair’. The out of network billing approach by hospitals, air ambulances and other entities to not be in network within an in network hospital system was a primary driver of the no surprise act legislation. Other areas associated with the no surprise act relate to appropriate notification by how out of network providers (e.g. specialists or PCPs) must provide a good faith estimate of the costs at least 72 hours prior to a patient appointment (note there is some exceptions on when okay to provide notification less than this time frame) so the patient knows the practice/provider is out of network and estimated associated costs. Most patients of pediatric practices are in network but practices should evaluate their current approach for self pay and out of network patients.
The federal No Surprises Act, established as part of the Consolidated Appropriations Act of 2021, places requirements on health insurers and health care providers that are designed to protect consumers in surprise billing situations. In practice, “surprise billing” refers to large, unexpected bills charged to individuals by out-of-network providers at in-network facilities. Beginning January 1, 2022, the No Surprises Act prohibits surprise billing for (1) out-of-network emergency services, including air ambulance (but not ground ambulance) services and (2) in-network nonemergency services provided under certain circumstances.
The research from the Kaiser Family Foundation shows that out of network surprise bills occur in about one out of five ER visits and between 9% and 16% of patient hospital visits are associated with out of network providers. The concern from the patient’s perspective is that out of network coverage usually maintains lower reimbursement amounts from the payer and higher patient cost sharing. From a providers perspective, there are some payers that the in network reimbursement rate is ‘unacceptable’ so the group is unable to participate with a particular insurance. So the act has two main goals:
- Require that private health plans to cover the out of network claims and apply in-network cost sharing for patients.
- Prohibiting providers hospitals and other entities from billing patients more than in-network cost sharing amounts.
The concern from a provider/practice perspective is that a payer reimburses at an in-network rate for these out of network patients at an amount that is unacceptable reimbursement level (usually their is a reason why the practice is out of network for a select payer). The No Surprise Act has requirements related to determining the payment amount for surprise, out of network medical bills. This includes negotiations between providers and payers. While there are some guidelines in the no surprise act, over time we will learn how some of the payers will operate related to out of network billing.
The act applies to self- and fully-insured health insurance plans. In these surprise billing situations, the act generally requires health carriers (i.e., insurers and plan administrators of self-insured plans) to bill patients at the in-network level of service and calculate patient cost-sharing based on in-network rates. By establishing the maximum patient responsibility for emergency and non-emergency surprise bills, the act also prohibits balance billing for these services. (“Balance billing” refers to providers billing patients for the difference between a service’s cost and the amount the health carrier reimburses the provider for the service.)
The act also provides a methodology for calculating how much insurers pay providers in surprise billing situations. However, this federal methodology does not apply in states that have their own surprise billing laws or an all-payer model agreement. Among other things, the act also (1) requires insurers to allow a parent to designate a pediatrician as the primary care provider (PCP) for a child if the plan requires a PCP, and (2) prohibits insurers from requiring prior authorization or referrals for obstetrical and gynecological care (42 U.S.C. § 300gg–117(b) & (c)).
The act similarly requires surprise bills for non-emergency services from an out-of-network provider working in an in-network facility to be covered: 1. without the need for prior authorization; 2. regardless of whether the provider is in- or out-of-network; and 3. at the in-network level of benefits, including at or below the in-network cost-sharing, regardless of other coverage terms and conditions (42 U.S.C §300gg–111(b)). The same cost-sharing requirements and calculations described above for emergency services apply to nonemergency services.
Considerations for Pediatric practices:
Pediatric practice should evaluate their current self pay policy to insure within No Surprise Act Regulations. Most Pediatric practices have an approach for patients/families that either do not have insurance or their insurance is out of network to reduce their amount invoiced to families related to self pay patients to an amount that is within the same reimbursement of a common insurance payer for the practice. This approach appears to be within the ‘spirit’ of the no surprise act.
What many non-pediatric practices were doing was to charge the patient the full billed amount of the practices fee schedule (no discount) and have the patient submit the bill to the payer for reimbursement related to the out of network rate. This usually left the patient/family paying the entire billed amount to the out of network provider without the benefit of the negotiated rate by the payer. Note that with the No Surprise Act, providers can still practice this approach but they need to first inform the patient and obtain written approval (prior written consent) from the patient that the patient understands they will need to pay the entire billed amount, the patient will receive a good faith estimate and the patient understands that this provider is out of network. Note that this waiver of the no surprise act does not apply to emergency situations, hospitalist providers, radiology and lab services,
For self-pay patients, the practice needs to provide a good faith estimate of the cost for the family (e.g. for sick appointments, the practice charges $75 and $105 for Well checks if no insurance). Note that the practice should also consider that the no surprise act regulations apply to Laboratories and Imaging centers. Patients should be directed to the in network lab and imaging centers (if the center is out of network, the center should be informing the patient). The patients should receive a good faith estimate in writing that provides a list of all charges associated with the visit and the patient estimated cost (if out of network or self-pay). This should include the patient name, date of birth, primary item or service in understandable language, itemized list of items or services, name of provider, Taxid and NPI Number. If a patient visits an out of network laboratory, imagining center, specialist or other provider, the provide should provide the following to the patient:
- A statement in the waiver that informs the patient that they are not required to waive their protections associated with the no surprise act and a list of in-network provider options for their service in the area.
- A statement that the out of network provider/organization can refuse to treat if the patient does not sign the waiver.
- A statement that waiving the protections of the no surprise act could cost the patient more.
Overall, the no surprise act is a step to help protect consumers related to the complexities of out of network charges. Most Pediatric practices have most if not all of their patients as in-network. Most Pediatric practices provide a lower patient cost for non-covered services that aligns to approach established by the no surprise act. Payers and out of network providers have additional regulations and associated guidelines to establish in 2022. For more information or to read the details of the new regulation go to the federal register at the link below 2021-21441.pdf (govinfo.gov) (note that the regulation is 163 pages in length).