What You Need to Know about the Biden-Harris Administration’s Actions to Prevent Surprise Billing (September 2021
On September 30, 2021, the Departments of Health and Human Services (HHS), Labor, and the Treasury (the Departments), along with the Office of Personnel Management (OPM), issued a second interim final rule with comment period, “Requirements Related to Surprise Billing; Part II,” to protect consumers from surprise medical bills under the No Surprises Act. This rule provides additional consumer protections, including:
- A process that takes consumers out of the middle of a payment dispute between providers and health plans;
- Requirements for health care cost estimates for uninsured (or self-pay, meaning you have coverage but choose not to have your care billed to your health plan) individuals;
- A payment dispute resolution process for uninsured (or self-pay) individuals; and
- Expanded rights to external review (what individuals with job-based or individual health plans can use to dispute when certain claims are denied payment, as described below).
Along with the release of this second interim final rule, CMS launched new online information at https://www.cms.gov/nosurprises dedicated to the No Surprises Act, with general information about provisions to prevent surprise billing. Additional information will be posted on the website over the next several months to highlight different provisions as they become more relevant to stakeholders and interested consumers.
This is the third rule the Departments and OPM have issued to implement the No Surprises Act. Earlier this month, they issued a proposed rule to help collect data on the air ambulance provider industry.
What is a surprise medical bill?
Most group health plans and health insurance issuers that offer group or individual health insurance coverage have a network of providers and health care facilities (in-network providers) that agree to accept a specific payment amount for their services. Providers/facilities that are not part of the network for a plan or issuer network (out-of-network providers) usually charge higher amounts than the contracted rates the plans/issuers pay to in-network providers.
When a person with health insurance coverage gets care from an out-of-network provider, their health plan usually doesn’t cover the entire out-of-network cost, leaving that person with higher costs than if they had been seen by an in-network provider. In many cases, the out-of-network provider can bill the person for the difference between the billed charge and the amount paid by their health plan, unless prohibited by state law. This is known as “balance billing.” An unexpected balance bill is called a surprise bill.
Surprise bills and balance bills affect many Americans, particularly when people with health coverage unknowingly get medical care from a provider or facility outside their health plan’s network. This can be very common in emergency situations, when people usually go (or are taken) to the nearest emergency department without considering their health plan’s network. It can also happen when people with health coverage receive care from an out-of-network provider at an in-network facility.
Who will benefit from this rule?
Rules related to the No Surprises Act include important protections for the majority of consumers who do not receive health coverage through federal programs. The rules don’t apply to people with coverage through programs like Medicare, Medicaid, Indian Health Service, Veterans Affairs Health Care, or TRICARE, since each of these programs already has other protections against high medical bills. The rules also include key updates for people who are uninsured (or self-pay) for their care.
Today’s “Requirements Related to Surprise Billing; Part II” rule details how providers, facilities, providers of air ambulance services, and plans and issuers can negotiate payment for out-of-network bills and can access the federal arbitration process when these organizations can’t agree on payment arrangements, taking consumers out of the middle. The rule also addresses additional protections for uninsured (or self-pay) consumers who are seeking care, and steps they can take if a medical bill is much higher than expected.
Overall, these surprise billing protections apply to you if you get your coverage through your employer (including a federal, state, or local government employer), a multi-employer plan, or through the federal Marketplace and state-based Marketplaces, or if you purchase coverage directly through a health insurance plan.
If you’re uninsured (or self-pay for care), this rule includes protections to ensure you know how much your health care will cost before you get it and have a way to challenge a bill if it is much larger than expected.
How does today’s rule help?
Today’s rule takes consumers with job-based or individual health plans out of the middle of surprise bill payment disagreements, and provides a process for providers, facilities, providers of air ambulance services, and health plans to negotiate out-of-network payments.
This rule helps to limit costs you may have to cover when you get a surprise bill. In the event of a surprise bill, how much you have to pay is capped. This capped rate is determined by referring to a state payment agreement, state law, or the qualifying payment amount. The qualifying payment amount is generally the average in-network rate for the same or similar items or services for the health plan.
Payment Disputes: Federal Independent Dispute Resolution for Providers, Facilities, and Health Plans
The rule also outlines a process for resolving payment disputes between your out-of-network provider or facility and your health plan for how much the out-of-network provider or facility will be paid for the services you got when surprise billing protections apply. Generally, when you get health care items or services, your provider or facility sends a claim for payment to your plan/issuer. When a claim is made for an item or service that’s covered by surprise billing protections and the health plan denies payment or pays less than anticipated, either the health plan or the provider or facility can choose to start an open negotiation period that lasts 30 business days. If the health plan or the provider/facility cannot agree on a payment rate, either can begin the federal independent dispute resolution process to resolve the payment disagreement.
This process brings in a third-party known as a certified independent dispute resolution entity that will work with the health plan and provider or facility to decide the payment amount. More information on the federal independent dispute resolution process can be found in the general fact sheet.
As the consumer, you aren’t involved in this process and your cost-sharing is limited to the in-network costs you would need to pay for the service. Any additional remaining costs for the out-of-network portion beyond this needs to be negotiated between your health plan and the out-of-network provider or facility. This process is only for payment disputes about the amount you were billed for out-of-network care in certain circumstances. If your health plan denies or only partially pays a claim for services you got because of an “adverse benefit determination” (a dispute involving things like eligibility, utilization review, or medical necessity of the item/service), you can appeal this decision through a separate process focused on what your health plan coverage provides.
Good Faith Estimates for Uninsured (or Self-pay) Individuals
The rule also protects uninsured (or self-pay) individuals from unexpected medical bills. Starting January 1, 2022, a provider or facility has to give an uninsured (or self-pay) individual a good faith estimate of expected charges after an item or service is scheduled, or upon request.
The good faith estimate will include expected charges for the primary item or service you’re getting, as well as for any other items or services that would reasonably be expected to be provided as part of the same scheduled or requested items/services.
For example, if you were getting surgery, the estimate might include the cost of the surgery, any labs or tests, and the anesthesia that might be used during the operation. If an item/service is something that isn’t scheduled separately from the surgery itself, it will generally be included in the good faith estimate. Other items/services related to the surgery that might be scheduled separately, like pre-surgery appointments or physical therapy in the weeks after the surgery, won’t be included in the good faith estimate.
To make this good faith estimate as useful for uninsured (or self-pay) individuals as possible, providers must:
- Provide a good faith estimate to an uninsured (or self-pay) individual:
- Within 1 business day after scheduling (this timeline applies when your primary item or service is scheduled at least 3 business days before the day you would receive it) or no later than 3 business days after scheduling (this timeline applies when your primary item or service is scheduled at least 10 business days before you would receive it), depending on scheduling; or
- Within 3 business days after an uninsured (or self-pay) consumer requests a good faith estimate.
- Include in the good faith estimate an itemized list of each item or service, grouped by each provider or facility offering care. Each item or service has to have specific details and the expected charge.
- Provide a paper or electronic copy of the good faith estimate, even if the provider also provides the good faith estimate information to you over the phone or verbally in-person.
- Provide the good faith estimate using clear and understandable language.
Payment Disputes Between Uninsured (or Self-pay) Consumers and Providers Based on Good Faith Estimates
Additionally, this rule lays out a new dispute resolution process if you’re an uninsured (or self-pay) individual and get a bill for an item/service that’s substantially greater than the expected charges in your good faith estimate. Beginning January 1, 2022, under this process, you can:
- Begin dispute resolution between you and the provider when your actual billed charges for a particular provider/facility are at least $400 more than the good faith estimate you were given. You have 120 calendar days from the day you get the bill to begin the process.
- Request that a third-party dispute resolution organization review the good faith estimate, your bill, and information submitted by you and your provider/facility. The third-party dispute resolution organization will use this information to determine if the additional charges you were billed are allowed, or if the provider can charge you only what was on your good faith estimate or some other amount lower than the bill.
To offset some of the costs of operating the dispute resolution process while keeping it accessible, HHS will charge consumers an administrative fee of $25 in 2022. However, if the resolution ends in the consumer’s favor, this fee will be credited back on their bill by the provider/facility.
External Reviews of Denied Claims for Insured Consumers
This rule expands the scope of the external review process, which is what individuals with group or individual health coverage can use to appeal a payment for a health care item/service that was denied by their health plan due to an item/service not being covered, restrictions on coverage, or the item/service not being considered medically necessary by the health plan. This rule specifically says that coverage decisions that involve whether a health plan is complying with the surprise billing and cost-sharing protections under the No Surprises Act protections are eligible for external review. For example, if your plan/issuer covers emergency care under the No Surprises Act and you get care at an emergency room but your health plan denies payment because it doesn’t believe the items/services you received were emergency services, you could appeal this decision using the external review process, which will help determine whether your health plan needs to cover the care you got. In addition, grandfathered plans that are not otherwise subject to external review requirements will be subject to external review requirements for coverage decisions that involve whether a plan or issuer is complying with the surprise billing and cost-sharing protections under the No Surprises Act.
When does the rule take effect?
Consumer protections in the rule will take effect beginning on January 1, 2022. More information on how the rule impacts various types of health plans, providers, and organizations supporting payment dispute processes is described in this general fact sheet.
Is there an opportunity to provide public comment on any of these changes?
Comments on “Requirements Related to Surprise Billing; Part II” are due by 5pm ET 60 days from the rule’s publication in the Federal Register. Learn more or submit comments through the Federal Register.
If you are interested in getting updates on the federal independent dispute resolution process, including information on the certification of independent dispute resolution entities, sign up for the “No Surprises Act Dispute Resolution” email list or access your subscriber preferences at the No Surprises Act Dispute Resolution email list.
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