Will Brandt, Class of 2022, Belmont Law
The following will serve as a primer on the “No Surprises Act” (“The Act”) that Congress passed on December 27, 2020. The Act goes into effect on or after January 1, 2022. At the highest level, The Act seeks to protect patients from surprise medical bills and deter out-of-network provider payments. As a preliminary matter, it is important to define “surprise medical bills” and “out-of-network provider payments.”
First, let us establish an example. In the example, a person is in a bad car accident. The person is rushed to the hospital and has emergency treatment. The patient is well-insured and believes that she will only be responsible for paying the deductible. However, at the hospital the patient was taken to the doctor the patient saw was “out-of-network.” This means that the patient’s health plan will not cover, or cost-share, like it would have if the doctor was an “in-network” provider. Because the patient expected the costs of emergency care to be covered by her health plan, she will be surprised with a bill indicating that her health plan did not cover this scenario.
With that example as background, let us now look at how The Act seeks to protect patients from these surprise bills. The Act contains key provisions that ban surprise billing in some, but not all, emergency situations. Specifically, “. . . . it will be illegal for providers to bill patients for more than the in-network cost-sharing due under patients’ insurance in almost all scenarios where surprise out-of-network bills arise, with the notable exception of ground ambulance transport.” Further, The Act includes provisions that protect against the cost of surprise medical bills. Once The Act goes into effect, patient health plans must treat in-network and out-of-network services the same when evaluating cost-sharing.
The Act seeks to protect patients who lack a meaningful choice. For most elective procedures, a patient can choose the provider and make sure that the provider is covered under their health plan. Even then, the Physician Assistant, Anesthesiologist, or other attendant staff may not be covered. So, The Act is absolutely a win for patients who won’t be surprised by large out-of-network bills when receiving emergency care or elective procedures or being transported by an air ambulance. However, this does create a problem. If the patient visits an out-of-network provider for emergency services, the patient can’t be denied. So, the provider will charge the patient (or their health plan) some amount of money for those services. However, because this is out of network, there is not an agreed upon price between the insurer and the provider. Therefore, The Act includes a process to resolve payment disputes. First, insurers have thirty days after they receive a bill to either pay the “out-of-network rate” directly to the provider or deny the claim. If the insurer denies the claim, then the provider and insurer enter an Independent Dispute Resolution (IDR) process.
According to United Healthcare, the IDR process functions as follows. Both the insurer/health plan and the provider will submit an offer along with any documentation supporting their position to the IDR entity, which will choose between them. In choosing either the insurer/health plan or provider offer, the IDR can consider certain factors such as the median contracted rate for the disputed items and services, the provider’s market share, the provider’s training and qualifications, and the severity of the patient’s condition. When making a decision, the IDR entity cannot consider government program rates (Medicare, Medicaid, Tricare), provider billed charges or usual and customary charges.