On December 21, 2020, as part of the nearly 5,600-page coronavirus economic relief package, a measure entitled the “No Surprises Act” was included to ban surprise medical bills.[1] Once the “No Surprises Act” goes into effect in 2022, healthcare consumers will not get balance bills when they seek emergency care, when they are transported by an air ambulance, or when they receive non-emergency care at an in-network hospital, but are unknowingly treated by an out-of-network physician or laboratory. Patients will pay only the deductibles and copayment amounts that they would under the in-network terms of their insurance plans.
Additionally, medical providers will not be allowed to hold patients responsible for the difference between those amounts and the higher fees they may want to charge. Instead, those providers will have to work out acceptable payments with insurers. For the uninsured, for whom everything is out of network, the bill requires the secretary of the Department of Health and Human Services to create a provider-patient bill dispute resolution process.
In some cases, physicians can balance-bill their patients, but they must get consent in advance. This part of the bill is aimed at patients who want to see an out-of-network physician, perhaps a surgeon or obstetrician recommended by a friend. In those cases, physicians must provide a cost estimate and get patient consent at least 72 hours before treatment. For shorter turnaround situations, the bill requires that patients receive the consent information the day the appointment is made. The legislation allows this only in non-emergency circumstances and bars many types of physicians from the practice. Anesthesiologists, for example, cannot seek consent to balance-bill for their services, nor can radiologists, pathologists, neonatologists, assistant surgeons or laboratories. Essentially, this provision allows consumers to forfeit protection.
The legislation gives insurers and providers 30 days to try to negotiate payment of out-of-network bills. If that fails, claims would go through an independent dispute resolution process with an arbitrator who would have the final say. The bill does not specify a benchmark or standard to which all bills will be held, but it bars physicians and hospitals from using their "billed charges" during arbitration. Such charges are generally far higher than negotiated rates and bear little to no relation to the actual cost of providing the care. That is a win for insurers, employers and consumer advocates, as allowing billed charges would mean higher prices — potentially driving up premiums — in cases sent to arbitration.
Hospitals and doctors also secured a win as the bill bars consideration of Medicare or Medicaid prices during arbitration. Those government payments are often far lower than the negotiated rates paid by insurers and self-insured employers. Instead, the bill says negotiators can consider the median in-network prices paid by each insurer for the services in dispute. Other factors can also come into play, including whether the medical provider tried to join the insurers' network and/or how sick the patient was compared with others. It also allows consideration of network rates a provider may have agreed to during the previous four years, which might help some high-priced services, such as air ambulances, remain costly even in arbitration.
The new federal rules will cover most types of insurance plans, including those offered by self-insured employers.
[1] President Trump has until December 28, 2020 to sign the full economic relief package bill.
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