No Surprises Act: How to avoid noncompliance and unwanted surprises

The No Surprises Act (the act) is here, and healthcare organizations have work to do to understand its complexities, update policies, train staff, and ensure compliance at facilities.

Overview of the act

In a nutshell, the goal of the act is to protect patients from receiving surprise medical bills. Its scope includes items and services provided to individuals enrolled in health coverage through their employer, the Health Insurance Marketplace (the marketplace), or an individual health insurance plan purchased directly from an insurance company. It also includes protections for uninsured or self-pay patients. It doesn’t include patients covered by Medicare or Medicaid since these patients are already protected and aren’t at risk for surprise billing.

Balance billing for insured patients

Balance billing, also known as “surprise billing,” happens when a provider bills patients for the difference between its or the healthcare facility’s charge and the amount allowed by the insurance provider, i.e., the difference between the total cost of services being charged and the amount the insurance pays. For example, if the provider’s charge is $1,000 and the amount allowed by insurance is $900, the provider may seek to “balance bill” the remaining $100 to the patient.

The act prohibits balance billing in the following types of situations:

• Emergency services: In this scenario, an insured patient receives covered emergency services but from an out-of-network provider and/or emergency facility.
  • To illustrate: Bob, who has marketplace coverage, has severe chest pains and calls 911. He’s taken via ground ambulance to the nearest hospital facility with an emergency department where he receives stabilizing treatment. Bob can’t be balance billed. If his marketplace provider denies all or part of the services due to the patient being out-of-network, the healthcare facility can’t balance bill the patient for the denied charges. Note that the act requires the marketplace provider to pay reasonable charges for services in these situations, with the exception of the ground ambulance company that can balance bill for out-of-network transportation services because the act doesn’t cover ground ambulance services.
• Nonemergency services: In this situation, an insured patient receives covered nonemergency services from an out-of-network provider delivered as part of a visit to an in-network healthcare facility.
  • For example, Kim, who has employer-sponsored health insurance, discovers a lump in her breast. Her primary care provider orders a mammogram that shows a suspicious mass. She’s referred to the local in-network hospital’s outpatient department for a biopsy. The biopsy is reviewed by a pathologist who is out-of-network. The act bans the pathologist from billing Kim more than the in-network cost sharing amounts determined by her health plan.
• Air ambulance services: A person gets covered air ambulance services provided by an out-of-network provider of air ambulance services.

Notice and consent exceptions

In certain situations, a hospital facility can bill the patient for the balance for services, but only in limited situations, and only when the “notice and consent” requirements of the act are followed.

In situations where the healthcare facility provides the patient with notice of the out-of-network charges — and the patient consents to the charges — the act doesn’t regulate billing for nonemergency services for:

• Nonemergency covered items or services provided in an out-of-network hospital, outpatient hospital department, or ambulatory surgical center.
• In-network items or services that aren’t covered under the terms of an individual’s healthcare plan or coverage.

Good faith estimates for uninsured or self-pay patients

State-licensed or certified healthcare providers are required to give good faith estimates of healthcare charges to every new and continuing patient who’s either uninsured or isn’t planning to submit a claim to their insurance.

Providers are also required to inform every uninsured or self-pay client of their right to receive a good faith estimate.

The list of services to be provided should differentiate between the services that the provider will be offering and those offered through what the act defines as “co-providers” and “co-facilities.”

The good faith estimate must be provided in accordance with the following timing:

• If a service is scheduled at least 10 business days in advance, the estimate must be provided within three business days of when the scheduling was made.
• If a service is scheduled at least three business days in advance, the estimate must be provided within one business day of scheduling.
• If a service is scheduled less than three business days in advance, an estimate is not required.
• If an individual requests a good faith estimate, it must be provided within three business days.

There are no provisions within the act that allow patients to waive their right to a good faith estimate.

The patient has the right to engage in a dispute resolution process if the actual costs of services significantly exceed those listed in the good faith estimate.

A compliance checklist

To avoid surprises and ensure your organization is on track for compliance with the act, consider taking these steps:

• Analyze your billing data and determine if your healthcare facility will perform any balance billing of out-of-network patients. Determine the situations where balance billing is allowed and procedures for providing proper notice and consent.
• Establish a No Surprises Act policy that formally establishes how your healthcare facility will comply with the requirements.
• Establish monitoring processes to identify — before services are provided — self-pay patients for whom good faith estimates are required.
• Establish a process to provide disclosure statements to emergency and nonemergency patients of their rights under the act.
• Establish monitoring processes before billing occurs to identify out-of-network denials so that prohibited balance billing doesn’t occur.
• Train employees on the new processes.
• Provide education to medical groups and independent physicians who provide services at your facility on the balance billing prohibitions.
• Prepare and implement plans for internal audit and compliance testing.

Preparing for these changes will take time and effort, so start sooner rather than later. And remember, you don’t have to do it alone. We’re here to help you prepare — give us a call.