The No Surprises Act goes into effect January 1, 2022, and protects patients from surprise medical bills and establishes an independent dispute resolution process for payers and providers.
Just as revenue cycle executives are coming up for air from the CMS price transparency mandate, they have another date to add to their compliance calendar: January 1, 2022. That's the day that the No Surprises Act goes into effect.
The legislation has two main parts. First, it protects patients from surprise medical bills.
"Under the recently announced No Surprises Act, patients will only have to pay the in-network cost-sharing responsibilities for their care, while payers and providers will negotiate payment for the rest," Rob LaHayne, CEO of TouchCare, a healthcare concierge service, tells HealthLeaders via email.
The No Surprises Act also establishes an independent dispute resolution (IDR) process for payers and providers.
"It takes consumers out of the middle of the dispute between the payer and the provider," says Becky Greenfield, partner with Wolfe Pincavage, a Miami law firm specializing in healthcare, insurance coverage, and business law.
The IDR will use a "baseball-style" arbitration to settle disputes between payers and providers. Each of the parties will offer a payment amount, and an independent arbitrator will choose one offer or the other, rather than an amount in between.
"That incentivizes those parties to [each] make a reasonable offer," Greenfield says.
This so-called "final-offer arbitration" process can help prevent the parties from making bids that are either too high or too low.
"The incentive created by arbitration brings some elements of market dynamics into the dispute-resolution process," says Benjamin L. Chartock, associate fellow at the Leonard Davis Institute of Health Economics and lead author of a recent Health Affairs study about arbitration in out-of-network medical bill payment disputes in New Jersey. "A more extreme offer by one of the parties in arbitration helps them financially if they win but might lower the probability that they win."
In advocating for a dispute resolution process, hospitals had been pushing for arbitration, whereas payers had called for benchmark payments, such as ones tied to median in-network rates.
"This process edges the surprise billing issue closer to the dispute resolution and regulatory structure common in many of today's workers' compensation structures, where most states removed patient liability well over two decades ago," notes Scott Bennett, vice president of access innovation at Maestro Health, via email.
From a consumer perspective, the No Surprises Act essentially makes out-of-network balance billing a thing of the past. That's especially important for patients who live in states that don't already have such protections in place.
According to the Commonwealth Fund, 18 states have no balance billing protections in place. The rest have comprehensive or partial protections.
"It requires that insurers apply the in-network, out-of-pocket benefits to emergency services and [to] out-of-network services in in-network facilities," Greenfield says, such as services provided by an out-of-network anesthesiologist working in an in-network facility.
"Not only can you not be billed the difference between what the insurer pays and what the provider bills, you also cannot apply out-of-network deductibles to these types of services," she says.
According to an announcement from the U.S. Senate Committee on Health, Education, Labor & Pensions, the legislation:
- Holds patients harmless from surprise medical bills, including from air ambulance providers, by ensuring they are only responsible for their in-network cost-sharing amounts, including deductibles, in both emergency situations and certain non-emergency situations where patients do not have the ability to choose an in-network provider
- Prohibits certain out-of-network providers from balance billing patients unless the provider gives the patient notice of the network status and an estimate of charges 72 hours prior to receiving out-of-network services and the patient provides consent to receive out-of-network care
- Provides additional consumer protections when insurance companies change networks, including a transition of care for people with complex care needs and appeal rights for consumers
- Provides a true and honest cost estimate that describes which providers will deliver their treatment, the cost of services, and provider network status
Revenue cycle considerations
Although the legislation won't go into effect for nearly a year, there are things that revenue cycle executives should be thinking about and working on as they prepare.
1. Establish processes to end balance billing: "First and foremost—especially if you're not in a state that already has balance billing protections—you need to establish a process to make sure that patients are not balance billed," Greenfield says.
2. Get ready to provide estimates: Providers also must prepare to give patients a "true and honest cost estimate."
"Those processes need to be in place," according to Greenfield. "[Revenue cycle] staff needs to be trained on this as well to make sure that they're compliant, because there are civil monetary penalties involved for noncompliance."
3. Remember that arbitration costs money: Chartock notes that "arbitration is not free," so providers need to consider their dispute resolution options.
"Disputing parties have the option as well to resolve these payment disputes for out-of-network bills offline and, if I were in a situation like that, I would carefully consider doing that as well," he says.
4. Pay attention to the details: Although the No Surprises Act was signed into law, more details are still coming. For example, the Commonwealth Fund notes that "Federal officials will have to establish a list of eligible arbitrators and help interpret the factors that will guide arbitrators' decisions."
"There is still a rule-making period that must take place between the passage of the law and when it begins to take effect," Chartock says. "We know the text of the law, but not the intricate details of how the law will be enacted."
Alexandra Wilson Pecci is an editor for HealthLeaders.
The No Surprises Act makes out-of-network balance billing mostly a thing of the past.
It will use "baseball-style" arbitration to settle disputes between payers and providers.
Revenue cycles should prepare by establishing processes to provide estimates, stop balance billing, and stay updated on how the legislation will be enacted.