Have you ever received a surprise medical bill from a provider you did not designate? This often occurs when consumers seek care at an in-network hospital only to later find out that not all providers within that hospital share in the same network agreement. According to a study from Peterson-KFF, this occurs in about 1 in 5 emergency room visits and between 9% and 16% of in-network hospitalizations for non-emergency care. The good news is you are now protected from this kind of inadvertent billing. The No Surprises Act (NSA), which took effect in 2022, establishes federal protections against surprise medical bills. Surprise medical bills arise when insured consumers unwittingly receive care from out-of-network hospitals, doctors, or other providers they did not choose.

Surprise billing places a significant financial burden on consumers, especially when health plans deny out-of-network claims or apply higher out-of-network cost sharing.

The NSA protects consumers by:

• Prohibiting doctors, hospitals, and other covered providers from billing patients more than the in-network cost sharing amount for surprise medical bills.

• Requiring private health plans to cover these out-of-network claims and apply in-network cost sharing.

The law applies to both job-based and non-group plans, including grandfathered plans.

Under the new law:

Balance billing is prohibited.

This occurs when a provider bills you for the difference between the provider’s charge and the allowed amount. Out-of-network providers for emergency services are not allowed to “balance bill” patients beyond the applicable in-network cost sharing amount for surprise bills. This also goes for out-of-network providers who render non-emergency services at an in-network hospital or other facility.

Health plans must cover surprise bills at in-network rates. The law now requires private health plans to cover surprise medical bills for emergency services as well as out-of-network provider bills for services rendered at in-network hospitals and facilities.

Coverage for emergency services without prior authorization.

Surprise bills must be covered without prior authorization, and in-network cost sharing must apply. In-network cost sharing for surprise bills will be based on a “recognized amount,” which in most cases will be the median in-network payment amount under the plan for the same or similar services.

Out-of-network providers are prohibited from sending out bills for excess charges.

The law specifies that providers “shall not bill, and shall not hold patients liable” for an amount that is over the in-network cost sharing amount for such services.

Dispute resolution.

In the event of a surprise billing, providers still get paid, and this is where dispute resolution is introduced. If your state does not have a surprise billing law or you require more detailed support, providers can utilize the Independent Dispute Resolution Process (IDR). This aids providers and facilities to determine how much a payor must pay an out-of-network provider or emergency facility for services that fall under balance billing restrictions. On the patient side, uninsured individuals can implement a patient-provider open dispute resolution process if their bill is significantly higher than the Good Faith Estimate (GFE).

Specific oversight and enforcement activities are required.

Individual states may enforce federal requirements against the health plans they regulate—non-group health plans and fully insured employer-sponsored plans—with federal fallback enforcement required if it is determined that states are failing to substantially enforce the law. It is the federal government’s primary responsibility to provide oversight and enforcement with respect to self-insured group health plans, which today cover about half of all people with job-based coverage, and which states are preempted from regulating under the Employee Retirement and Income Security Act (ERISA). The Secretaries of Labor and Treasury must audit a sample of plans each year to ensure that plans are covering surprise bills and applying in-network cost sharing correctly.

So how will the NSA affect patients over the long run? It will provide significant protections for consumers who would otherwise be forced to pay extremely high balanced bills for providers they did not have a choice in such as radiologists, pathologists, and anesthesiologists. If there is an error in a bill, the process for fixing it should be relatively simple on the patient side as the NSA aims to leave the patient out of payment disputes. As implementation proceeds (and as federal courts consider legal challenges to such regulations), it is also possible that NSA standards and procedures will be modified further. If you have any questions or concerns regarding the NSA, we invite you to reach out to us.

This article was published in the Spring 2023 issue of the General Insurance Services Risk & Business Magazine.  Access the full publication here.