Surprise Medical Billing Protections Coming for Participants in 2022

Beginning in 2022, employer-sponsored health plans will be required to pay providers certain emergency and out-of-network charges that would have otherwise been balance billed to participants.

That is the centerpiece of the No Surprises Act, part of the sprawling Consolidated Appropriations Act, 2021, which was signed into law by President Donald Trump on December 27, 2020.

The No Surprises Act covers insured and self-funded plans and applies to out-of-network emergency care and to out-of-network care provided at in-network facilities. A major goal of the act was to prohibit providers from surprise-billing patients who unknowingly received out-of-network services, such as imaging or lab work, at an in-network facility. The act specifically applies to air ambulance services, but it excludes ground ambulance services. An advisory committee will further study balance-billing issues related to ground ambulance services.

The No Surprises Act—which modifies the Employee Retirement Income Security Act (ERISA), the Public Health Service Act (PHSA), and the Internal Revenue Code—prohibits providers from balance billing and requires plans to hold patients harmless from balance billing for all out-of-network air ambulance and emergency services and for out-of-network services provided at in-network facilities. Future regulations will provide many details.

The act generally limits a patient’s out-of-pocket costs for these services (such as deductibles, copayments, and coinsurance) to what they would have been had the services been provided in-network.

There is an exception for out-of-network providers delivering services at in-network facilities. In such cases, patient costs would not have to be limited to in-network rates if the facility previously notified the patient of its network status and estimated charges at least 72 hours in advance, and the patient had consented to receiving the services. This exception would apply to items and services such as equipment and devices, telemedicine services, imaging services, laboratory services, and preoperative and postoperative services.

Employers had generally favored setting a standard for determining the amounts providers would have to be paid. Rather than take that approach, the act sets up a negotiation and arbitration system. Healthcare providers generally favored this approach.

Under the No Surprises Act, plans and providers have 30 days to negotiate payment amounts. If negotiation fails to “result in a determination of an amount of payment,” the parties have 4 days to initiate a binding arbitration process called “independent dispute resolution” (IDR). In this process, each party submits a payment amount offer and supporting evidence, and the certified IDR entity chooses one of the amounts. The IDR entity does not have the authority to choose an amount not offered by either party. The losing party must also pay the arbitration costs. The act defers to states to set payment standards or dispute resolution processes for fully insured plans.

In determining the payment amount, the IDR entity will consider the median in-network rate, which is the median amount that all plans of the sponsor would charge for that same service in the same geographic area.

An IDR entity will also consider information submitted by the parties, the provider’s training, education, experience, and quality; patient acuity and the complexity of services furnished; the market share of the provider, facility, plan or insurer; good-faith efforts by providers or plans or insurers to enter into network agreements; and prior contracted rates during the previous four plan years. An IDR entity may not review usual and customary or billed charges, and may not take into account reimbursement rates used by the Medicare or Medicaid programs.

A party that initiated IDR may not request IDR with the “same other party” for the same type of service for at least 90 days following a determination. This provision is designed to encourage the parties to negotiate settlements. After 90 days, the parties may engage the IDR process again, including for any claims that occurred during the 90-day period. (There are a few differences in the IDR process for air ambulance charges. Most importantly, this 90-day restriction on requesting new IDR determinations does not apply.)

Beginning in 2022, the act provides for external reviews for any adverse determinations made under the surprise medical billing provisions of ERISA and the PHSA.

Other changes in the No Surprises Act include

• directing the secretaries of the U.S. Department of Labor, U.S. Department of Health and Human Services, and the U.S. Department of the Treasury to issue regulations by January 1, 2022, on the provider nondiscrimination rules under the Affordable Care Act; and

• establishing rules related to continuity of care to protect patients when provider relationships with a network are terminated.