man reacts with concern while looking at bills to be paid

The best medical billing surprise is no surprise: Although 32 states already have legislation that deals with surprise billing practices, new federal provisions apply to markets not controlled by the states.

Congress Passes Surprise Medical Billing Legislation

By Haley Nicholson | Feb. 3, 2021 | State Legislatures Magazine

In the final days of its 116th meeting, Congress passed legislation containing COVID-19 relief and fiscal year 2021 government funding. The bill also included language—the No Surprises Act—to address surprise medical billing practices and provide new guidelines for private insurers. The act, which was meant to be passed as a standalone bill earlier last year, was the result of months-long negotiations between House and Senate leadership. While 32 states already have legislation that deals with surprise billing practices, the new federal provisions apply to markets not controlled by the states. How states will be impacted continues to be evaluated.

Under the act, health plans will be required to hold patients harmless from surprise medical bills, and patients will be required to pay only the in-network cost-sharing for out-of-network emergency care or certain services performed by out-of-network providers at in-network facilities. A patient’s in-network payments for out-of-network surprise bills will go toward the patient’s in-network deductible. Examples of cost-sharing can include copayments, coinsurance and deductibles.

Out-of-Network Rates

So, what will happen to claims with out-of-network rates and how will they be paid? Providers and payers will have a 30-day negotiation period to settle. If they cannot reach a negotiated agreement, the parties can use a binding arbitration process, also known as independent dispute resolution (IDR), where one offer prevails. Processes will be administered by independent, unbiased entities with no affiliation to the providers or payers. The administrators must consider the market-based median in-network rate, along with other relevant information provided by the parties. Following the IDR, the party who initiated the process may not take the same party or parties back to resolution for the same item or service for 90 days following a decision.

When it comes to out-of-network providers and facilities, both will be prohibited from sending patients surprise medical bills for more than the in-network cost-sharing amount. Certain out-of-network providers will also be prohibited from surprise billing patients unless they give the patient notice of their network status. Providers will have to provide patients an estimate of the charges they will receive 72 hours prior to receiving out-of-network care. Patients will have to provide consent to receive the care, and if an appointment is made within a 72-hour window, a patient must receive the notice the day the appointment is made and be asked for consent to receive care.

Air Ambulances

Finally, one of the more contentious aspects of the legislation was air ambulance billing practices. The final measure included several provisions regarding surprise air ambulance bills:

  • Patients are held harmless from surprise air ambulance medical bills and are required to pay only the in-network cost-sharing amount for out-of-network air ambulances, with the cost-sharing amount applied toward their in-network deductible.
  • Air ambulances are barred from sending patients surprise bills for any amount greater than their in-network deductible and cannot send patients surprise bills for more than the in-network cost-sharing amount.
  • There will be a 30-day negotiation period for air ambulance providers and payers to settle out-of-network claims. If parties cannot reach a negotiated agreement, they can access binding arbitration with the additional option to account for the cost of providing air ambulance service in rural and frontier areas.
  • Air ambulance providers will be required to submit two years of cost data to the secretaries of Health and Human Services (HHS) and Transportation and insurers and two years’ worth of claims data related to air ambulance services to the HHS secretary. The secretaries will then publish a report on the costs and claims data submitted, and establish an advisory committee on air ambulance quality and patient safety.

In addition to the provisions listed above, the bill makes several other changes: including in-network and out-of-network deductibles on insurance cards, implementing protections against provider discrimination and establishing a grant program to create new and improve existing State All Payer Claims Databases, among other measures. Read a full summary of the bill provided by the House Committee on Energy and Commerce.

Haley Nicholson is senior policy director, health and human services, in NCSL’s State-Federal Affairs Program.

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