It’s more than a month since the No Surprises Act came to effect on 1st January 2022. According to the final guidelines provided by the Department of Health and Human Services (HHS), the act is all about patient protection from surprise medical bills.
The fundamental principles of the No Surprises Act call for accountability and transparency on the part of medical insurers to minimize payment disputes. This no surprises act couldn’t have come at a better time — there is an increase in payment disputes pitting physicians against insurers who have developed a habit of paying too little too often.
Physicians have been conferred certain rights under the No Surprises Act, such as dispute non-payment and demand for higher pay. One of the major highlights of the No Surprises Act is the Independent Dispute Resolution (IDR) process. IDR provides physicians with an avenue to air their complaints and demand fair compensation when insurers pay too little for out-of-network medical care.
So what does the no surprises act mean to health providers, more so the physicians? Does the act put you as a physician at a loss? Now that the No Surprises Act is fully enacted, here’s a low down on what physicians should know.
Provisions of the Act
For starters, the enacted law is going to be implemented by the following 3 bodies:
- Department of Treasury
- Department of Labor
- Department of Health and Human Services
The No Surprises Act calls for collaboration between payor organizations and physicians in addressing out-of-network billing. Providers will need to take the lead to remain compliant with this new No Surprises Act in some instances, as we outlined below:
Providers Will Have to Disclose Patient’s Billing Protection
According to the newly enacted law, physicians will now be required to inform patients of their rights with regard to balance billing. This information will need to be publicly displayed at the facility and on the provider’s website.
Under the act, this disclosure must include:
- Requirements under the law
- State-level protection applicable
- Contact info for federal and state agencies where patients can report violations of the act.
Notice and Consent for Balance Billing by Out-of-Network Providers
As a physician, the No Surprises Act will also require you to write to patients informing them of the costs associated with a service. For out-of-network services, this notice should be provided 72-hours before the service is delivered. The notice should contain the following information:
- A statement that the provider is out-of-network
- A good faith estimate – an estimate of the expected cost of a physician’s services to an uninsured patient.
- In-care management requirements or requirement for prior authorization
- A disclaimer that the consent is optional and that the patient can opt for an in-network facility instead – according to a legislative advisory by American Hospital Association.
Out-of-network providers should provide this notice in 15 languages commonly spoken in their region.
So, what happens if a patient disputes the amount billed by a physician if the bill is over $400 of the initial good faith estimate? Does the act put the physician at a loss? Well, not exactly. The new enactment means that physicians who provide out-of-network medical services can still get meaningful payment for their services through an arbitration process.
The Federal Register outlines that the internal dispute resolution (IDR) process will involve the following stages:
The patient has to make an initial payment to the physician or a notice of denial of payment. If the physician doesn’t agree with the amount paid, they can engage in an open negotiation for 30 days.
During the 30-business days, the two parties are free to engage in an open negotiation and resort to the IDR if a deal does not materialize. Following the end of the open negation period, any party can use the federal IDR portal to submit a notice and initiate the IDR process. A 4 business days window is provided for this.
Any party can initiate the process by sending a sufficiently filled form identifying the disputed services within a period of 30-days from the date the services were rendered. The process can also be initiated if an out-of-network facility receives a denial of payment from the payor.
Here’s an example of a scenario that may lead to a dispute;
“If a physician charges $2500 for total services offered while the initial good faith estimate charges were $2000, then the patient can initiate a dispute process. However, if the initial good faith estimate was $2200 then the dispute will be considered illegible. “
The bottom line here is that the billed charges shouldn’t exceed the good faith estimate by $400 or more.
That said, when a party initiates the IDR, they must provide the following details:
- Identify the preferred IDR entity which must be certified.
- Provide details about the dispute
- Include the qualifying payment amount, which is the issuer’s median in-network rate.
Within 30-days of being selected, the arbitration entity must determine a reasonable offer for the physician. The two entities will be invited to submit their final offers, which may be higher than the initial offer made by the payor and lower than the initial physician’s fee.
The arbitrator is advised to use the following as a guide when determining a suitable offer for the physician.
- The patient’s acuity.
- The physician’s training and years of experience or the scope of service delivered.
- Contracted rates between the two parties in previous encounters.
- The median in-network rate for similar health care services. This rate must be inflated upwards using the Consumer Price Index.
- Willingness to reach an agreement.
- Both parties market share.
- Type of ambulance vehicle.
- The population density at the pick-up location by ambulance.
This process can take up to 60 days for the physician to get paid for their services – considering the initial 30 business days for open negotiation and another 30 days for arbitration. If the physician is not fully satisfied with the outcome of the arbitration, they have to wait for 90 days before lodging another IDR process.
What Does the No Surprises Act Cover?
The No Surprises Act covers all patients with commercial medical insurance plans. The act does not specify public insurance since the existing programs such as Medicaid and Medicare Advantage protect patients against surprise bills. The act also applies the following:
- All out-of-network emergency health facilities.
- Airlifting by air ambulance, whether this is done as an emergency service or not.
- Post stabilization medical care provided at an out-of-network facility pending safe transfer to a facility of choice.
- Referrals from an in-network to an out-of-network physician.
What happens if the services are rendered by an out-of-network facility upon request by an in-network facility? In this case, the former facility must notify the patient of this and request for the patient’s written consent to receive the said care from the out-of-network facility. What’s more, this must be done 72-hours before delivering the service.
That said, the law provides an exemption to this rule — when the patient is unable to choose a provider, such as in services relating to the following groups.
- Emergency medicine
- Diagnostic testing
In this instance, once the patient gives their consent to receive the above services, the No Surprise Bill will not apply and the out-of-network facility will be able to issue the patient with a surprise bill.
Effect of No Surprises Act
The common practice of billing departments within provider organizations to always bill patients first will now have to change. Here’s how this affects you as a provider.
- Providers to contact the insurance plan first for any outstanding bills. One of the main highlights of the act is the removal of patients almost entirely from the billing process.
- As it stands, providers now ought to consider how different payor organizations handle claim submission to expedite the payment process. This is critically important because each health plan has a different approach to the payment process.
- Out-of-network providers will have to adjust their rates for certain services to match in-network providers. While the act does not state a limit to the applicable rates, providers will have to work closely with payor organizations to establish acceptable rates.
As a result, providers will have to come to grips with submitting claims and coordinating with other physicians to set standard rates for services with respect to No Surprises Act.
As discussed, the No Surprises Act will change not just how physician’s charge for their out-of-network services but also the time taken for the payment to be disbursed. Besides, the arbitration process will introduce administrative costs — both parties can avoid these costs by striking an agreement during the 30-day open negotiation period.
Simply put, the new law prevents out-of-network physicians from charging patients with surprise bills exceeding the in-network cost-sharing amounts. This will likely give rise to disputes as the out-of-network facilities may reject the insurers’ disbursement. That said, we hope the dispute resolution process will provide reprieve to many physicians who thought the law was out-rightly going to undermine their payment.
As the law is in full effect now, we wait to see the full impact of its implementation and any modification that arises in the future. To get more details on No Surprises Act feel free to contact us now.