Overview of 2022 Price Transparency Regulation
The No Surprises Act took effect on January 1, 2022. It was enacted to offer patients financial protections against surprise medical bills, prohibiting balance billing for certain care that is out of-network (OON). According to CMS, two-thirds of all U.S. bankruptcies are tied to medical expenses. It is estimated that this rule will apply to ~10M out-of-network medical bills each year. While many states have already taken steps towards addressing surprise billing, an uneven level of consumer protection precipitated a federal stance with the No Surprises Act.
What is Surprise and Balance Billing?
Surprise billing occurs when a patient unknowingly receives care from providers that are outside of their health plan’s network and can happen for both emergency and non-emergency care. This could be a radiologist who read films from the emergency department where the hospital is in-network but the radiologist is not. CMS reports that one out of every six emergency room visits involves care from at least one OON provider. And, according to the Kaiser Family Foundation (KFF), “between nine percent and 16 percent of in-network hospitalizations for non-emergency care include surprise bills from out-of-network providers whom the patient did not choose.”
While balance billing — when a provider invoices a patient for the amount that insurance did not pay — is prohibited for Medicare and Medicaid, the new rule extends similar protections to patients insured through employer-sponsored and commercial health plans. However, the rule does not apply to HRA/HSA plans, retiree-only plans, or voluntary dental and vision plans administered under a separate agreement or policy. Self-insured plans may delegate compliance to a third-party administrator, however, they are liable for TPA non-compliance.
In particular, this rule now bans surprise billing for emergency services, requiring that emergency care be treated as in-network without requirements for prior authorization. Specifically, this rule bans other types of out-of-network charges for items like ancillary care at an in-network facility, as well as OON charges without advance notice.
HHS Reports Highlights the Cost to Consumers
A report from the U.S. Department of Health and Human Services (HHS) demonstrated that millions of Americans with private health insurance could be helped by the No Surprises Act. Written by researchers in HHS’s Office of the Assistant Secretary for Planning and Evaluation (ASPE), the report shares that “surprise medical bills are relatively common among privately-insured patients and can average more than $1,200 for services provided by anesthesiologists, $2,600 for surgical assistants, and $750 for childbirth-related care.”
The ASPE research revealed that out-of-network charges vary greatly by state, ranging from a low of three percent in Minnesota to a high of 38 percent in Texas. Another finding in the report showed that patients who received a surprise bill for emergency care paid physicians more than 10 times as much as patients without a surprise bill for emergency care.
No Surprises Act Oversight
Under the No Surprises Act, doctors and hospitals are prohibited from billing patients more than the in-network cost-sharing amount for surprise bills, risking a penalty of up to $10,000 for each violation.
Many provider organizations are sending out notifications to how they are handling the rule and alerting patients of their procedure. They may choose to provide the patient, who has an upcoming appointment with an out-of-network provider at an in-network facility, a form called the Surprise Billing Protection Form. It could contain a Good Faith Estimate of charges for the service requested, a clear statement that consent is optional, and by signing the form, the patient agrees to pay more for out-of-network care.
It is the responsibility of providers and payers to identify bills that are protected under the regulation. However, if a health plan or provider fails to properly identify a surprise bill, it is ultimately the patient’s role to recognize that they believe there was a violation of the rule and seek relief.
According to KFF, “The law requires that consent must be given at least 72-hours in advance or, if the patient schedules a service less than 72-hours in advance, no later than the day the appointment is made. For same-day scheduled services, regulations permit consent to be given at least three hours in advance. It is possible, for example, that an out-of-network doctor could ask an already hospitalized patient in the morning to waive their protections for a service the doctor schedules to be given later that afternoon.”
How Providers and Payers Can Get Control of Pricing Data for Transparency
Healthcare organizations that are developing a pricing transparency strategy or looking to align that strategy with the overall consumer experience, can find operational and technical support through SDLC Partners. We’ve created a robust machine-readable format (MRF) tool needed to comply and build goodwill. Ask us about it.