The bipartisan No Surprises Act (“the Act”) was enacted on December 27, 2020. The Act provides comprehensive patient protection against surprise medical bills that occur when a patient receives a bill for the difference between an out-of-network provider’s charge and the amount paid by the patient’s insurance company, less patient cost sharing amounts.
Specifically, the Act protects patients from surprise bills for: “1) emergency services delivered by out-of-network providers, including emergency air transport, or by out-of-network facilities; and 2) nonemergency services provided by out-of-network providers in network facilities and for which patients do not consent.”1
The Act provides a framework for many provisions but leaves the final details of several items subject to future rulemaking.
Key Provisions of the No Surprises Act
The following are some of the most noteworthy provisions of the Act:
- Effective January 1, 2022 and prohibits balance billing, except under very defined circumstances.
- Applies to Employee Retirement Income Security Act (ERISA) plans and to state-regulated plans in states where a balance billing law doesn’t exist already.
- Patient deductibles for out-of-network emergency care are the same as for in-network care, and deductibles must be printed on insurance cards.
- Requires a qualifying payment directly to the provider or response with a full denial within 30 calendar days of claim receipt.
- Creates an accessible Income-driven Repayment (IDR) process to address out-of-network payment disputes.
Deadlines are set throughout 2021 regarding the standardization of reporting from insurers to state-level all-payer claims databases (APCDs), rulemaking for the qualifying payment amount (defined as the median of contracted rates as of January 31, 2019 and adjusted for inflation from 2019-2021), and rulemaking for the IDR process.
With many of the more important provisions of the Act not completely defined, how does a medical practice prepare for the provisions of the law?
- Understand applicability of the law in the state(s) where the practice is located.
- Have a mechanism in place to identify current out-of-network payment trends and compare them to payments received after January 1, 2022.
- Be prepared to take underpaid claims through the IDR process.
Understanding Applicability of the Law
The No Surprises Act applies to any state where a law prohibiting balance billing does not already exist. In states where a law does exist, state law will supersede the Act. Non-participating providers who practice across state lines should be mindful of whether federal or state law applies to their insurance reimbursement. This knowledge can greatly impact how reimbursement is handled and how providers and billing companies approach perceived underpayments.
Benchmarking Current Payment Trends to Compare to Future Payments
The Act provides for a robust and easily accessible informal dispute resolution (IDR) process for the resolution of claims for which the provider feels are underpaid. However, it is critical to have a mechanism in place to determine when those claims are underpaid and when that underpayment is low enough to seek additional payment through IDR. Reporting from a practice’s billing system should provide average reimbursement by CPT code and by payer from past time periods in order to identify the average qualifying payment average made for the same services in 2022.
Taking Underpaid Claims Through the IDR Process
Likely the most important piece of the Act for providers is the creation of a robust and easily accessible IDR process to dispute the payment amount of claims. Much of the way the IDR process will work is subject to rulemaking throughout 2021 (giving providers an opportunity to help lobby for and shape the process). High level provisions include:
- No minimum dollar threshold to access IDR, and up to 30 days of claims can be batched according to defined criteria.
- Numerous factors are considered during the IDR process, but no factor takes primacy.
- Other factors, especially surrounding various payment benchmarks, are NOT to be considered.
- Well-defined timeline for the IDR process, including negotiation, final decision, and cooling off periods.
It is important for providers and billing companies to understand the fundamentals of the new IDR process and to take an active role during the rulemaking process. It could be beneficial to identify a legal representative who is an expert in the new IDR process to ensure that claims are reviewed and processed as favorably as possible.
The next several months will be critical, as practices begin to understand the potential impact the Act will have on their bottom line and business operations. The use of billing system reports and automated software to identify and validate patient insurance coverage, determine in-network status, and verify deductible amounts will be extremely valuable in navigating the Act and recovering revenue.
Though much of the Act has yet to be defined, it is never too early to take proactive steps to prepare for successful navigation of the new payer landscape on the horizon in 2022.
This article is a collaborative effort with ZOLL Data Systems.
1https://www.commonwealthfund.org/blog/2020/surprise-billing-protections-cusp-becoming-law