HHS Unveils Interim Final Rule for Surprise Billing

The Requirements Related to Surprise Billing; Part I , set to take effect on January 1, 2022, is the first in a series of rules to protect patients from healthcare-related financial hardships.

The federal government on Thursday unveiled the first in a series of new rules designed to protect patients from financial hardship due to surprise medical bills and balance billing.

"No patient should forgo care for fear of surprise billing," Health and Human Services Secretary Xavier Becerra said in a media release announcing Requirements Related to Surprise Billing; Part I.

"Health insurance should offer patients peace of mind that they won't be saddled with unexpected costs," Becerra said.

The interim final rule will take effect for providers on January 1, 2022, and on or after that date for commercial plans or contract years. It will restrict excessive out-of-pocket costs to consumers from out-of-network billing and balance billing, which is already banned by Medicare and Medicaid. The interim rule extends those protections to people insured through employer-sponsored and commercial health plans.

The interim final rule:

• Bans surprise billing for emergency services, regardless of where they are provided. Those services must be billed on an in-network basis without requirements for prior authorization.
   
• Bans high out-of-network cost-sharing for emergency and non-emergency services. Patient cost-sharing, such as co-insurance or a deductible, cannot be higher than if such services were provided by an in-network doctor, and any coinsurance or deductible must be based on in-network provider rates.
   
• Bans out-of-network charges for ancillary care (such as anesthesiology or an assistant surgeon) at an in-network facility in all circumstances.
   
• Bans other out-of-network charges without advance notice.
   
•  Requires providers and hospitals to give patients a plain-language consumer notice explaining that patient consent is required to receive care on an out-of-network basis before that provider can bill at the higher out-of-network rate.

The interim rule was implemented under the bipartisan No Surprises Act, a provision of the Consolidated Appropriations Act, 2021. HHS, the Department of Labor, Treasury, and the Office of Personnel Management cowrote the interim rule.

Surprise billing is rampant, and patient advocates have been howling for years for the federal government to take action. It's one of the few issues in Congress that Democrats and Republicans can agree upon.

Two-thirds of bankruptcies are caused by outstanding medical debt. Research has shown that one-in-six emergency department visits and inpatient hospital stays include care from at least one out-of-network provider.

A 2019 study by the Government Accountability Office found that air ambulance providers charged anywhere from $36,400 to more than $40,000, with 70% of these transports furnished out-of-network and most or all of the cost falling on patients.

Biden administration officials say such egregious practices are why the rules are needed.

"No one should ever be threatened with financial ruin simply for seeking needed medical care," said Secretary of Labor Marty Walsh. "Today's interim final rule is a major step in implementing the bipartisan No Surprises Act that will protect Americans from exorbitant health costs for unknowingly receiving care from out-of-network providers."

Written comments must be received within 60 days after the rule is published in the Federal Register.