In 2016, The New York Times reported about a patient who had a routine neck surgery for a herniated disk. After the surgery, he received the usual explanation of benefits statements (EOBs) and bills. This was to be expected with the healthcare system in the United States. However, buried in the charges was a bill for $117,000 for an assistant surgeon who was out of network with the patient’s health insurance plan. Eventually, the patient complained to his health insurance, and they agreed he should not be responsible for the bill. The solution? The insurance company paid for the services in full.
Unfortunately, this scenario is not uncommon, especially when there are emergency medical procedures being performed. Someone may go to a hospital and see a doctor that is in network with their health insurance. Yet there could be those who are a part of a surgical team who may be out of network with a patient’s health plan. This can result in exorbitant medical bills that the average family cannot afford. Indeed, it is estimated > 15% of emergency room visits involve at least one out of network clinician, and two-thirds of all bankruptcies in the United States are due to medical debt. The “No Surprises Act” is meant to shield patients from runaway out of network medical bills.
No Surprises Act
Signed into law in 2020 and implemented in 2022, the “No Surprises Act” has many protections in place for patients:
- Surprise bills for out of network emergency services are forbidden.
- Patients may not be charged more than in network rates for out of network emergency services.
- Patients may not be balanced billed by out of network providers (patients receive bill to pay the remainder of the balance after their health insurance has paid their portion).
- Out of network providers and facilities must give notice that they are out of network and costs may be higher.
- Medical facilities must provide a good faith estimate for services to patients who are uninsured or self-pay.
Additionally, some have speculated good-faith estimates may expand to those with commercial health insurance within the next 12 months. It is important to note the No Surprises Act does not supersede state laws that already regulate how out of network billing operates. However, in the absence of a state law, the No Surprises Act is applied.
This law will also impact clinical labs and pathology services. It is estimated that about 10-20% of all pathology and laboratory services may be out of network, and therefore may fall within the jurisdiction of the No Surprises Act. Similar to medical facilities, some labs may have new policies, resources, and ways to dispute claims in order to be within compliance.
Included in this new law is a process for billing disputes. The health plan or medical facility can ask for arbitration by an independent third-party for disputed medical bills. The Centers for Medicare and Medicaid Services (CMS) has a list of certified Independent Dispute Resolution Entities. These certified organizations have expertise in claims administration, healthcare law, managed care, medical coding, and arbitration.
Hospital Price Transparency
The No Surprises Act follows a new CMS rule that was implemented on January 1st, 2021, called “Hospital Price Transparency.” Separate from the No Surprises Act, the Hospital Transparency rule aims to protect patients by requiring all hospitals in the United States to provide their rates for services in a patient-friendly format. In 2021, CMS sent over 330 warnings to hospitals that were out of compliance, in addition to about 100 corrective action plans. Noncompliance could cost hospitals a minimum of $300 per day and a maximum $5,500 per day, depending on the number of hospital beds at their facility. The Hospital Transparency rule and No Surprises Act both provide financial protections for patients, although through slightly different mechanisms.
As with any healthcare reform in the United States, implementing and following the new rules and regulations may be challenging. Fortunately, several organizations have information to comply with the No Surprises Act. The American Medical Association (AMA) has a toolkit for physicians that reviews emergency services, non-emergency services, and good faith estimates. The American College of Emergency Physicians (ACEP) has similar resources for clinicians. There is also assistance on the CMS website.
In an ideal world, the patient would always get the appropriate treatment at a fair price, which will be paid by a health insurance plan in a timely matter. However, the healthcare system in the United States is much more complex and fragmented, to the frustration of patients, providers, and payors. The No Surprises Act and Hospital Price Transparency rule are meant to protect patients from unnecessary high costs of critical medical care. These regulations are new, so there may further changes as the true impact is realized. The goal of healthcare is to provide the right treatment at the right time for the right patient. Patients should not be responsible for unreasonable medical costs just because they unknowingly use a provider who is out of network. Hopefully, the No Surprises Act and Hospital Price Transparency rule will financially protect all patients who need medical care.
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