In July and September 2021, the Biden administration issued two interim final rules related to the No Surprises Act through the Departments of Labor (DOL), Health and Human Services (HHS), Treasury and the Office of Personnel Management (OPM) – the legislation is meant to reduce the practice of surprise billing in healthcare when a patient receives services from an out-of-network provider. The two interim final rules went into effect on Jan. 1, 2022, subsequently banning surprise billing for emergency services and ancillary care at in-network facilities, limiting high out-of-network cost-sharing for emergency and non-emergency services, as well as provisions related to the independent dispute resolution process, good faith estimates for uninsured patients and the patient-provider dispute resolution process.
Details of the Legislation
The provisions of the two interim final rules create requirements for healthcare providers, facilities and ambulance services that include prohibitions on certain balance billings, notice and consent requirements and requirements tied to disclosures about balance billing protections. Essentially, the rule states that out-of-network providers may not bill patients more than in-network cost-sharing amounts, which is determined by the recognized amount determined by state law or application of a state All-Payer Model Agreement. In cases where neither of these apply, a federal process will be used to determine the amount. Providers, facilities, ambulance providers or plan/issuers may enter a 30-day open negotiation period in the event a payment dispute occurs for any services subject to surprise billing legislation.
For patients who are considered uninsured or self-pay individuals, providers and facilities are required to inquire about the individual’s health coverage status. Should the patient inform the provider they are seeking services as an uninsured patient, meaning the patient does not have current benefits for services under a group or individual health plan, the provider is required to provide a good faith estimate of the expected charges for any items and services to be provided along with a primary item or service. Such patients can request good faith estimates without already scheduling a service. Patients should also have the ability to access the provider’s website to obtain information related to potential services. If uninsured or self-pay individuals are billed more than the good faith estimate, the legislation provides a process for such patients to initiate a payment dispute resolution. Per the Healthcare Financial Management Association (HFMA), uninsured and self-pay patients will be able to dispute their bill if the final charges end up exceeding the good faith estimate by at least $400. Arbitrators will consider whether the additional charges could have been anticipated at the time of the estimate.
The No Surprises Act allows exceptions to surprise billing protections if the patient knowingly consents to use an out-of-network provider for non-emergency services. When such services are provided by a nonparticipating provider, they are not allowed to bill beyond the allowed cost-sharing amount unless the patient has been provided a written notice and consent waiver within 72 hours in advance of the appointment. The provider should be prepared to provide a required good-faith estimate of the services’ cost, a list of in-network providers, and any information about medical care management, such as pre-authorization or pre-certification.
Revenue Cycle Preparations
As the interim final rules have now become in effect in 2022, this could mean significant changes, including new and different workflows, for hospitals, health systems and related organizations. Revenue cycle leaders should prepare by identifying the individuals on their teams who will be responsible for contacting patients and providing estimates regarding services for which patients are scheduled. With the recent and current decrease in staffing, revenue cycle leaders should also identify staff and/or automation partners that can assist in the process of estimations.
Data management may also become an area of concern for providers, particularly how to collect pricing data from co-providers and where to store the data. The federal government may provide a system for HIPAA-compliant transactions to be securely transmitted, therefore providing a template for vendors as a guide. Until then, providers should assess how they currently handle data storage and what action steps are needed to improve their infrastructure to accommodate an increase in data collection.
If not already in place, revenue cycle leaders must also develop and implement a strategy and processes to maintain compliance with the No Surprises Act while maximizing any reimbursement for out-of-network expenses covered by the new law. Providers can risk being under penalty if they violate the balance billing protections, which can mean up to $10,000 per violation. These violations could be detrimental to rural or critical access hospitals that have, particularly over the last two years, encountered challenges with reimbursement, payor requirements and an increase in patient responsibility (e.g., increases that correlate with layoffs, changes in employment and unemployed patients who may not be eligible for assistance or other coverage). Therefore, it is important that providers have appointed individuals from their legal and compliance departments on hand to collaborate and make key decisions to ensure adherence to the new law.
Understanding the financial implications will be imperative for providers – meaning a risk analysis may be needed to account for an organization’s case mix and payer mix, helping hospital leaders anticipate the potential financial impact. As revenue cycle leaders prepare to make any workflow changes, such changes must also be made to accommodate new patient cost-sharing and reimbursement rules, especially in states where there are no balance billing laws, or the laws provide only limited protection. Per the price transparency requirements, providers are required to provide all patients with estimates of the out-of-pocket costs related to services. Providers should therefore implement a correct insurance plan initiative to validate the patient’s insurance plan and ensure patients receive the most up-to-date estimates and understand their options if they are considered out-of-network.
Lastly, and perhaps most critically important, providers should pay close attention to how state laws interact with the federal ban on surprise billing – specifically, determine whether the No Surprises Act or the state law applies to the calculation of cost-sharing amounts and reimbursement rates for out-of-network care covered by the statute. However, it is important to note that based on the interim final rules, it is not clear when state law would apply over federal law, which can make it difficult for revenue cycle leaders to develop plans to implement compliance around the No Surprises Act, but in most cases, it can be expected that federal law will take precedence.
Windham Brannon is well-versed in the critical matters that revenue cycle leaders face. As you look to remain compliant with new legislation, you can reach out to your Windham Brannon advisor for questions and more information, or you can contact Danielle Epps.