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What the “No Surprise Act” Means for Consumers

In July, the U.S. Department of Health and Human Services (HHS), the U.S Department of Labor, the U.S. Department of the Treasury and the U.S. Office of Personnel Management released an interim final rule entitled “Requirements Related to Surprise Billing; Part I.”

Once finalized, the rule will protect consumers from surprise medical bills for emergency services, air ambulance services provided by out-of-network providers and non-emergency services provided by out-of-network providers at in-network facilities. 

  • One in five insured adults had a surprise medical bill in the last two years.
  • Two-thirds of adults are worried about being able to afford unexpected medical bills.
  • There is bipartisan support for government action to protect against surprise bills.

Typically, health plans contract with in-network providers to offer health care services at an agreed upon rate. When a member receives health care services from out-of-network providers, the health plan is usually billed more than it would have been charged by an in-network provider. In most cases, the health plan covers the amount it would normally pay an in-network provider, then bills the member for the difference (this is also known as “balance billing”). The member will likely also face increased cost sharing (e.g., co-payments, co-insurance and deductibles) for using out-of-network services. Not only can this create a financial hardship for members, it also drives up the cost of health care in general.

Ideally, consumers would do their due diligence and seek medical care from in-network providers to avoid balance billing and increased cost sharing. Unfortunately, this is not always possible. For example, many health care providers contract with specialists, such as anesthesiologists, to work in their facilities. Although the facility may be listed as an in-network provider, the consumer has no way of knowing the anesthesiologist included in the care team is an independent contractor who bills for their services separately or out-of-network. In this scenario, a consumer would be surprised to receive a separate bill for the balance not paid by their insurance plan because the service provided was technically out-of-network, even though the facility was in-network.

When a person needs emergency medical care, they usually end up at the nearest emergency department. There is no time to research whether the emergency department is in-network before receiving medical care. Similarly, air ambulance transports often lead to balance billing, as people needing this service don’t have the ability to choose an air ambulance company or confirm whether the air ambulance provider is in-network beforehand.

The recently issued interim final rule aims to address these concerns by requiring the following:

  • Emergency services, regardless of where they are provided, must be covered on an in-network basis – including co-payments, co-insurance and deductibles – without requirements for prior authorization.
  • Out-of-network balance billing and increased patient financial responsibility (e.g., higher co-payments) for ancillary care (e.g., care rendered by an anesthesiologist or assistant surgeon) at in-network facilities is prohibited.
  • Health care providers must provide patients with a plain-language consumer notice explaining that patient consent is required to receive care on an out-of-network basis before that provider can bill at a higher out-of-network rate.

The regulations are generally applicable for plan and policy years beginning on or after January 1, 2022. The HHS-only regulations that apply to group health care providers, facilities and providers of air ambulance services are also applicable beginning on January 1, 2022. 

Once finalized, this rule should help reduce surprise health care costs and confusion over in-network and out-of-network care for consumers.  

[Matthew Brown is the LHSFNA’s Health & Welfare Specialist.]

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