Tackling surprise medical billing is critically important to avert devastating monetary losses. This assumes significance considering that little over 66% of all bankruptcies filed in the US are tied to medical expenses.
Researchers, according to the Centers for Medicare & Medicaid Services (CMS), estimate that 1 of every 6-emergency room visits and inpatient hospital stays involve care from at least one out-of-network provider, resulting in surprise medical bills. The No Surprises Act, to come into force on January 1, 2022, is expected to put a full stop to the practice.
In our previous blog, we shared an overview of the key provisions of the No Surprises Act, how this rule will help, and who stands to benefit. In this second and final part of our series, we are focussing on the Act’s provisions for health insurance providers, which will become legally binding from the next year.
These interim final rules apply to group health plans and health insurance issuers offering group or individual insurance coverage, including grandfathered health plans. Let’s have a look at some of the health insurance requirements under the Act.
1. Emergency Services Coverage
The legislation requires insurers to cover emergency services, including air ambulance services, without any prior authorization and regardless of whether the provider is in or out of the health plan’s network. When provided by an out-of-network provider, the health plan must cover emergency services as if they were in-network — without any more restrictive utilization management requirements and at no more than the in-network cost-sharing amount. The cost sharing for surprise bills for in-network will be based on a “recognized amount,” which will be the median in-network payment amount under the plan for similar services. However, if the patient receives out-of-network nonemergency services with advance notice that the service is out of network and consents to that service with a higher bill, then a provider can bill more than the cost-sharing amount.
2. Provider Reimbursement
The legislation defines the “out-of-network rate” as what the health plan pays the out-of-network provider for services subject to these provisions. The rate will depend on certain circumstances, such as whether the service is subject to a state law that establishes the reimbursement amount or process for determining the reimbursement amount or the service was delivered in a state with an all-payer rate setting model. Health plans will be required to either pay or issue a notice of payment denial to the provider within 30 calendar days after receiving the bill for the services. The plan must reimburse the provider directly and cannot instead route payment through the patient. Any patient cost-sharing must count toward the patient’s deductible and/or out-of-pocket cost sharing maximum as though the services were provided in-network.
3. Advanced Explanations of Benefits
The Act empowers consumers to request an Advanced Explanations of Benefits (EOB) from their health plans. Payers offering group and individual health insurance coverage will be required to send patients EOB prior to scheduled care. The Advanced EOB must include information on whether the provider or facility delivering the item or service is in-network for that item or service, based on the patient’s health plan. The plans must also furnish the “good faith estimate” of expected charges, including likely billing and diagnostic codes, sent by the provider or facility, and an estimate of the plan’s payment responsibility along with the patient’s expected cost-sharing amount.
4. Transparency on Deductibles
Health plans offering group and individual health insurance coverage will be required to include new information on insurance identification cards for plan years beginning on or after January 1, 2022. These include all plan deductibles, including in-network and out-of-network deductible amounts, as applicable; maximum limits on out-of-pocket costs, including in-network and out-of-network out-of-pocket cost limits, as applicable; and a telephone number and web address for consumer assistance information, including information on in-network providers. The Act also mandates health plans to disclose information about broker commissions. Individual plans are required to inform the enrollees about the amount of direct and indirect compensation paid to brokers for that enrollment.
5. Continuity of Care
This provision provides for continuity of services for enrollees of health plans when there is a change in the plans’ provider network. These protections extend to individuals defined as a “continuing care patient” and include patients who are undergoing a course of treatment for a serious or complex condition, undergoing institutional or inpatient care, scheduled to undergo non-elective surgery including postoperative care, pregnant and undergoing treatment, or terminally ill and receiving services. Plans are required to ensure continuing care patients receive timely notification of changes in the network status of providers and facilities. Such patients will have up to 90 days of continued coverage at in-network cost sharing to allow for a transition of care to an in-network provider.
Conclusion: Health insurers act as a crucial bridge between patients and providers, giving a much-needed financial cushion to members and payment surety to hospitals. They are poised to play a critical role in the implementation of the No Surprises Act, which is part of the Administration’s continuing efforts for healthcare reform. Their significance can be gauged from the fact that the Act is tipped to protect more than 135 million Americans in employer-based plans regulated under the Employee Retirement Income Security Act, and many more in state-regulated plans in areas with no surprise billing legislation.
