On January 1, 2022, new federal regulations that seek to put a stop to surprise medical billing practices went into effect for the first time. The U.S. Department of Health and Human Services (HHS) celebrated this event with a press release titled, “HHS Kicks Off New Year with New Protections from Surprise Medical Bills.” In that release, HHS Secretary Xavier Becerra touted the rules as the “most critical consumer protection law since the Affordable Care Act.” Alongside the press release, HHS also released a fact sheet targeting consumers titled, “No Surprises: Understand Your Rights Against Surprise Medical Bills.”
Clearly, these promotional efforts demonstrate the federal government’s commitment to educating patients and consumers about the new rules and the protections they offer. Meanwhile, on the flip side of the compliance ledger, hospitals, health systems and insurers have spent the past several months advocating for changes to the rules while also frantically preparing for implementation. This comes as no surprise (no pun intended!) given the impact these rules will have on some hospital and facility billing and collection policies.
But beyond patients, hospitals, and insurers, the rules will also have a major impact on physicians. With that in mind, for those physician groups that are still wondering what these rules mean and why they are important to understand, here’s a Physician’s Guide to HHS’s New Surprise Billing Rules.
What is a surprise medical bill?
Generally speaking, a “surprise medical bill” comes when a patient receives care from a provider or facility and afterwards gets a bill that includes charges that are higher than expected. This most commonly occurs when: (a) patients receive emergency care from out-of-network providers or facilities (i.e. when an ambulance takes an unconscious patient to an emergency room at a hospital that is out-of-network with the patient’s health insurance coverage), or (b) patients receive care from ancillary out-of-network providers during scheduled visits to in-network facilities (i.e. when the anesthesiology services for a procedure performed by an in-network surgeon at an in-network facility are billed as out-of-network services).
As patients, we have all likely personally experienced the frustration of receiving a higher-than-expected bill in such circumstances or know a family member or friend who has.
What law are these new rules based on?
The rules stem from the No Surprises Act, which was included in the bipartisan $2.3 trillion COVID-19 aid and government funding bill (known as the Consolidated Appropriations Act, 2021) that Congress passed, and President Trump signed into law in December 2020. Three final regulations and dozens of sub-regulatory guidance documents were then issued last year under the Biden Administration to establish January 1, 2022, as the initial compliance date for several of the law’s key provisions. Or, for those who like to keep it simple, think: 2020 law, 2021 regulations, 2022 compliance.
How do these rules limit surprise billing?
For patients who have health insurance coverage through an employer or an individual marketplace plan, the rules that took effect January 1, 2022:
- Ban out-of-network bills for emergency care and require that cost sharing for these services (such as co-pays) always be based on in-network rates, even when care is received without prior authorization.
- Ban out-of-network bills if a patient goes to an in-network hospital for a procedure (unless the patient waives this right through a formal informed consent process).
- Require providers and facilities to share with patients easy-to-understand notices that explain the applicable billing protections and who to contact if they have concerns that a provider or facility has violated the new surprise billing protections.
For physician practices, it is important to note that these policies for patients with insurance are focused on and only apply in facility settings such as hospitals and emergency rooms. Thus, these provisions will have a very limited impact on most physicians in private practice that see patients in an office setting.
Do the rules affect uninsured or self-pay patients?
Yes. The new rules require providers to offer uninsured or self-pay patients a “good faith cost estimate” for all services. As HHS explains to patients in its fact sheet, “in most cases, these new rules make sure you can get a good faith estimate of how much your care will cost before you receive it.”
What are the good faith cost estimate requirements for uninsured or self-pay patients?
The cost estimate provision requires providers and facilities to inquire about an individual’s health insurance status at the time a service appointment is scheduled. Then, for services scheduled for uninsured (or self-pay) individuals, the provider or facility must provide a good faith estimate of all expected charges. The estimate must be delivered to the patient within 3 business days if a service is scheduled at least 10 business days in advance, and within 1 business day if a service is scheduled at least 3 business days in advance. (There is no requirement if a service is scheduled less than 3 business days in advance.)
In terms of content, the estimate must include the following information:
- Patient name and date of birth
- Description of the primary item or service
- Itemized list of items or services
- Applicable diagnosis codes (ICD), expected service codes (CPT, HCPCS, DRG, or NDC), and expected charges for each listed item or service
- Name, NPI, and TIN of each provider or facility represented in the estimate
- State(s) and office or facility location(s) where the items or services are expected to be furnished
- List of items or services that the provider or facility anticipates will require separate scheduling and that are expected to occur before or following the expected period of care for the primary item or service
- Disclaimer that there may be additional items or services the provider or facility recommends as part of the course of care that must be scheduled or requested separately
- Disclaimer that informs the individual of their right to initiate the patient-provider dispute resolution process if the actual billed charges are substantially in excess of the expected charges included in the good faith estimate
- Disclaimer that the good faith estimate is not a contract and does not require the individual to obtain the items or services
The estimate must also include “expected charges for the items or services that are reasonably expected to be provided together with the primary item or service, including items or services that may be provided by other providers and facilities.” For an uninsured patient getting surgery, this means that the estimate would have to include the cost of the surgery, as well as any labs, tests, and anesthesia that might be used during the surgery. Fortunately for providers, HHS has decided not to enforce this requirement until 2023 (because it acknowledged the challenges providers will face gathering this information from other providers).
Lastly, uninsured or self-pay patients who receive a final bill that exceeds the good faith estimate by $400 or more can dispute the final charges through a new federal dispute resolution arbitration process that physicians are now subject to.
What are the key takeaways for physicians?
Most of the key provisions included in these rules only apply to facility-based providers. For this reason, even though the new payer/provider independent dispute resolution process and out-of-network billing provisions have received the most attention from hospitals, the good faith advanced cost estimate provision will likely have the most significant impact on independent physician groups.
It is important to remember that this requirement applies broadly to all healthcare providers treating uninsured (or self-pay) patients, not just certain types of providers (i.e. physicians) or only providers that accept Medicare. Also, keep in mind that as part of the No Surprises Act, HHS must soon expand this requirement to insured patients as well.
In response, physician groups should take steps now to ensure they have the necessary technology infrastructure, personnel, and processes in place to deliver these pre-visit cost estimates to all patients. Doing so will help ensure compliance with the No Surprises Act and position physician groups for success in the world of consumer-focused healthcare.
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