Federal “No Surprises Act” Is Now the Law
By: Chalon C. Young
- The No Surprises Act took effect on January 1st, closing gaps in consumer protection and banning surprise medical billing.
- Health care providers should implement compliance programs that address the new law.
On January 1, 2022, the Biden Administration’s Federal No Surprises Act (NSA) took effect. The NSA provides new protections against unsuspected medical bills. It is intended to combat the negative impact of the rising cost of health care on patients. While many states had enacted laws to address surprise billing, a gap in consumer protection still remained. This gap will now be addressed by a federal ban on surprise billing.
Patients with Medicare and Medicaid already have protections against surprise billing, but until the passage of the NSA these protections did not extend to private health insurance. The NSA protects both privately insured and uninsured individuals. Insured patients are protected from out-of-network cost sharing and balance billing for emergency services from non-participating providers, as well as non-emergency services that are furnished by non-participating providers in participating facilities. The NSA also provides additional protection and requirements for health care providers.
Providers are required to give uninsured patients a good faith written estimate of the cost of the procedure and obtain signed consent before services. Payment disputes for insured individuals must be settled between the provider and the insurance company in a dispute resolution process that does not involve the patient.
Highlights of the NSA include:
- Cost Sharing: a patient’s copayment, coinsurance, or deductible (referred to as cost sharing) for emergency services by an out-of-network provider cannot be higher than in-network amounts. Patients’ out-of-pocket maximums are limited to the amount that would apply had the services been furnished by an in-network provider or facility. Individuals are not liable for costs exceeding in-network cost sharing.
- Balance Billing: out-of-network providers of emergency services are prohibited from billing patients the difference between the total cost of services and the amount paid by their insurance.
- Non-emergency Services: out-of-network providers of non-emergency services must give patients a good faith estimate of the cost of the procedure and obtain signed consent prior to billing. If the patient is billed more than $400 above of the estimate, they may dispute the bill through an independent dispute resolution process.
- Independent Dispute Resolution: the NSA requires that an independent dispute resolution process be established. Disputed amounts for uninsured patients will be negotiated between the provider and patient, and disputed amounts for insured patients will be negotiated between the provider and the insurance company. The losing party pays the costs.
- Ambulances: ambulances, both ground and air, are covered under the NSA. For insured patients, the cost sharing for transportation services is limited to the in-network deductible for a participating provider.
- Increased Transparency: health plans are required to disclose any provisions for balance billing and cost sharing to patients. Providers are required to inquire if patients are enrolled in a health plan and, if not, to provide a good faith estimate of cost prior to any non-emergency disclosure. Health plans must verify and update their provider databases at least once every 90 days to ensure that patients are given correct information about a provider’s participation.
Providers, both in-network and out-of-network, must ensure compliance with the new law or risk sanctions. Each state is authorized to enforce the NSA’s prohibition on surprise billing. In cases where a state has failed to enforce the requirements of the NSA, the Secretary of Health and Human Services is authorized to impose a civil money penalty of up to $10,000 per violation. The NSA’s arbitration requirement is confusing and continues to evolve. To protect against sanctions and ensure that required notices are being met, providers are encouraged to consult with counsel knowledgeable in these emerging regulations.
With the passage of the NSA, health care providers now have a robust federal law which must be integrated into their compliance policies. Pietragallo Gordon Alfano Bosick & Raspanti, LLP assists health care providers, corporations, and their leadership in proactively enhancing compliance and in responding to government investigations and enforcement.