On Jan. 1, the federal No Surprises Act (NSA or the Act) took effect along with voluminous implementing regulations. The law imposes significant and sometimes intricately detailed legal responsibilities on doctors and other licensed health care professionals, hospitals, certain medical facilities and insurers.
Today, we take a high-level look at the main provisions and concepts in the Act. We will discuss medical provider obligations to members of covered group and individual health plans, but the NSA also contains protections for uninsured patients.
The NSA’s purpose is to increase pricing transparency and protect patients from unexpected medical charges. Forbes reported earlier this month that 20% of Americans have gotten surprising bills after emergency medical care, so the NSA aims mainly to prevent surprise bills to for:
- Emergency care from out-of-network (OON) providers and facilities
- Medical services provided by nonparticipating professionals working within in-network facilities
- Out-of-network air ambulance services by plane or helicopter
Basically, the NSA in these situations limits patient liability to the same coinsurance, deductible or copay amounts they would have been responsible for if a participating (within the patient’s insurance plan) provider had performed the services. This comes up in the context of “balance billing” – the medical provider practice of billing the patient for the amount not paid by insurance.
A hypothetical example
Lawmakers were trying to prevent surprise billing like that described in the following hypothetical scenario.
A patient schedules a nonemergency surgery at an in-network hospital to keep their cost-sharing amount (deductibles, copays and coinsurance) at the lower level associated with participating providers. Unbeknownst to the patient, one doctor active in the patient’s care was an out-of-network provider working in the in-network facility. The patient is surprised to receive a bill from the outside physician at the out-of-network rate.
Under the NSA, the patient would only be responsible for any cost-sharing amounts they would have had for the same service in-network. An exception may apply if the patient first had received a proper pricing notice and had provided valid consent for the higher cost, but this is a narrow exception that does not apply to medical services within many specialties, including radiology, anesthesiology, neonatal and others as well as to services provided by an out-of-network provider when there was no available in-network provider at the in-network facility.
Continuity of care
When a patient is receiving ongoing or long-term medical treatment for a “serious and complex condition” from an in-network facility or provider, the provider has billing responsibilities should it become an out-of-network provider during the ongoing treatment. For example, they must continue to bill this patient at in-network rates and accept the patient’s in-network cost-sharing responsibilities.
Out-of-network providers and health plans will inevitably have disputes under the Act over out-of-network claims and rates. The Act provides for a 30-day negotiation period followed by a formal independent dispute resolution (IDR) process utilizing a certified IDR entity that resolves the dispute in an arbitration-like process.
The IDR process is very detailed and highly regulated. The IDR determination of the correct service price is final absent allegations of fraud or arbitrator misconduct.
Transparency: Provider directories and disclosures
There are also detailed requirements that health plans keep their in-network directories of providers up to date. Medical providers have a corollary duty to establish internal processes for submitting to plans timely, relevant information of related contractual changes impacting network participation.
In other contexts, NSA requires medical providers to provide certain information to health plans or patients. For example:
- Out-of-network providers must give preservice, good faith estimates (GFAs) of charges for scheduled procedures.
- Provider websites must contain public-facing information about laws regulating balance billing and surprise billing as well as government agencies that accept related patient complaints.
Air ambulance providers are required to submit to the federal government detailed data about annual costs, claims (in- and out-of-network), aircraft and locations, and more.
Interaction with state laws
If a state has surprise billing laws with greater patient protections or stricter provider requirements, the state law generally governs. In Kentucky, legislators have introduced bills pertaining to issues like surprise billing, balance billing, out-of-network billing, air ambulance claims, required disclosures, coverage for out-of-network services received at participating facilities, out-of-network emergency claims, GFAs and others.
However, none of these bills has passed so as of this writing in Jan. 2022, the federal NSA applies in the commonwealth. Each state may enforce the federal NSA no-surprise provisions (but potentially not for certain federally regulated health plans subject to ERISA or similar laws). If a state does not enforce NSA when appropriate, federal authorities can step in and do so. Still, other aspects of commonwealth law may impact NSA-type issues.
Takeaways for health care providers and facilities
This post is an overview of the NSA, but its statutory text and regulations are detailed, complicated and massive, requiring specific notice periods or time limits, notice content, deadlines, formulas or factors applicable to pricing or price estimates and many other procedural and substantive mandates. Every provider will need to revamp their billing and notice procedures to comply. NSA violations may subject a provider to civil monetary penalties (CMPs) up to $10,000 per violation, which the U.S. Department of Human Services (HHS) may waive for hardship or violations that were not done knowingly.
Any Kentucky health care provider with NSA regulatory compliance questions or needing to set up internal processes and procedures should seek legal advice from a knowledgeable health care attorney.