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Billing Protocols to Address the No Surprises Act for Out-of-Network Hospital Patient

What is a surprise medical bill?

A surprise medical bill is a bill charged when an insured patient receives care from an out-of-network hospital, doctor, or other providers they did not choose. This can include charges from out-of-network providers at an in-network hospital.

What is the No Surprises Act?

Beginning January 1, 2022, the No Surprises Act established new patient protections against surprise medical bills. For medical services covered by the No Surprises Act, out-of-network hospitals and providers are prohibited from billing a patient more than the applicable in-network cost-sharing amount, it also requires health plans to cover such out-of-network claims. This law also establishes a process to determine the payment amount for the surprise medical bill (discussed further below).

In addition, this law provides heightened protections for uninsured and self-pay patients, allowing them an opportunity to receive an estimated cost for planned items and services in advance of services being rendered. While this estimate, referred to as a good faith estimate, is not applicable to emergency procedures, it is crucial that hospitals and individual providers ensure they comply with this estimate requirement in advance of providing scheduled services to uninsured and self-pay patients.

What types of medical services are covered by the No Surprises Act’s prohibition on surprise medical billing?

The No Surprises Act covers several categories of medical services. Specifically, protections will apply to most surprise medical bills for:

• Emergency services: The majority of emergency services, including those provided in hospital emergency rooms, freestanding emergency departments, and urgent care centers that are licensed to provide emergency care. Emergency care is inclusive of screening and stabilization treatment for patients who believe they are experiencing a medical emergency or active labor. It also includes air ambulance transportation, but excludes ground ambulance transportation.
• Post-emergency stabilization services: This category generally falls within emergency services, and applies to such services provided in a hospital following an emergency visit. This type of care is considered emergency care until a physician determines the patient can safely travel to an in-network facility using non-medical transport, such a facility is available and will accept the transfer, and the transfer will not cause the patient other unreasonable burdens. The patient must receive written notice and give written consent before being transferred.
• Non-emergency services provided at in-network facilities: When out-of-network providers offer non-emergency services at in-network hospitals and other facilities, they are also covered services. Non-emergency services are broadly defined to include treatment, equipment and devices, telemedicine services, imaging and lab services, and preoperative and postoperative services, regardless of whether the services are provided within the facility itself.

Do I have to notify patients about the No Surprises Act?

Yes. Providers must notify patients of their surprise medical bill protections by posting a one-page disclosure notice summarizing the protections on a public website, and also to every patient to whom they provide a No Surprises Act covered service. The disclosure should be provided by the time payment is requested from the patient.

The applicable disclosure notice has been prepared by the Department of Health and Human Services (HHS), and is available here.

How will health plans determine payments for surprise bills?

This amount will likely be calculated by the health plan using its median in-network provider in the geographic area (the qualifying payment amount). A patient’s cost sharing for a surprise medical bill must be based on the qualifying payment amount.

Health plans and providers can negotiate privately over the amount to be paid for the surprise bill, and if they cannot agree, either party can ask for an Independent Dispute Resolution process to determine the payment amount. For further information on the Independent Dispute Resolution process, contact the healthcare attorneys at Sulloway & Hollis, P.L.L.C.

What is the penalty if I charge more than the in-network cost-sharing amount?

The No Surprises Act carries a penalty of up to $10,000 per violation.

Can I ask patients to waive their rights regarding surprise medical bills under the No Surprises Act?

It depends. The No Surprises Act does permit certain patients to give prior written consent to waive their rights and be billed more by an out-of-network hospital or provider.

Hospitals and providers are never permitted to ask patients to waive their rights for the following: emergency services, unforeseen urgent medical needs arising when non-emergent care is provided; ancillary services, including items and services related to emergency medicine, anesthesiology, pathology, radiology, and neonatology (whether or not provided by a physician or non-physician practitioner); diagnostic services including radiology and lab services; items and services provided by assistant surgeons, hospitalists, and intensivists; and items and services provided by an out-of-network provider if there is not an in-network provider who can provide that service in the facility.

In order to utilize a written consent waiver, it must contain certain standard information. The Department of Health and Human Services (HHS) developed standard notice and consent documents, which are available here. Such forms must be provided in the 15 most common languages in the geographic region where consent is sought, and qualified interpreter services must be provided if the patient’s own language is not among these 15 languages.

How far in advance do I need to seek a written consent waiver if I am an out-of-network provider?

Consent must be given at least 72 hours in advance unless the patient schedules a service less than 72 hours in advance. For same-day scheduled services, consent must be given at least 3 hours in advance. For example, a hospital patient admitted in the early morning for a late afternoon non-emergency procedure, which was only scheduled that day, could give written consent to waiving their billing protections.

Does the No Surprises Act require me to provide anything to uninsured and self-pay patients?

Yes. As noted above, hospitals and providers must give, both orally and in writing, a good faith estimate of expected charges for items and services, either upon request or at the time the service is scheduled. If any medical bill for services rendered in 2022 exceeds a good faith estimate by $400 or more, the patient can dispute the charge within 120 days of the invoice date.

Information regarding the availability of good faith estimates should be prominently displayed on the provider’s website and in the office and on-site where scheduling or questions regarding the cost of health care occur.

What must I include in a good faith estimate?

A good faith estimate must include:

• Patient’s name and date of birth;
• Clear and understandable description of the primary items or services, as well as the date of service, if applicable;
• Itemized list of items or services;
• Applicable diagnosis codes (to the extent available), expected service codes, and expected charges associated with each listed item or service;
• Name, NPI, and TIN (or SSN if applicable) of each provider/facility represented in the good faith estimate and the states and offices or facility locations where the items or services are expected to be furnished;
• List of items or services that the provider/facility anticipates will require separate scheduling and that are expected to occur before or after the expected period of care for the primary item or service (if applicable);
• Disclaimers regarding additional items or services that are recommended that must be scheduled or requested separately, that the good faith estimate is only an estimate, and that actual charges may differ. Should also note that the patient has the right to initiate the patient-provider dispute resolution process if the actual bill charges substantially exceed the expected charges in the good faith estimate and that the good faith estimate is not a contract and does not obligate the patient to obtain the item or service from any of the providers identified in the good faith estimate.

If any changes to the fees or frequency or type of services or items change, a new good faith estimate must be provided.  The good faith estimate, once provided, should be included within the patient’s medical record and maintained in the same manner.

When do I need to provide the good faith estimate?

When a service or item is scheduled at least ten business days in advance or if the patient requests the estimate, it must be provided within three business days. If the service or item is scheduled three to nine business days in advance, it must be provided within one business day. No good faith estimate is required if a service is scheduled less than three days before the appointment.

Do I need to provide a good faith estimate for every regular and/or recurring service?

No. Providers and facilities that anticipate treating a patient throughout the year may provide a single estimate to that patient as long as the estimate includes the expected scope and frequency of the recurring services. However, after twelve months, a new estimate for additional services should be provided and you should discuss any changes in the estimate.

Overall, how does the No Surprises Act change common billing practices?

Previously, out-of-network hospitals and providers would bill insured patients directly for the full, undiscounted fee for the services rendered while the patient was admitted. Such patients were then left with the obligation to submit the out-of-network claim to their health plan and collect any available reimbursement directly from the health plan.

Now, this practice must change. First, providers will need to determine the patient’s insurance status, and then submit the surprise out-of-network bill directly to the health plan. When submitting the bill, providers are encouraged to include whether the No Surprises Act protections apply to the claim (including, whether the patient waived such protections, as described above). Second, the health plan must respond within 30 days with the in-network cost-sharing amount for the claim, along with an initial payment to the provider. The health plan will then send the patient a notice, the explanation of benefits, directing the patient to pay the out-of-network provider its in-network cost-sharing amount directly. Once the explanation of benefits notice has been sent, the out-of-network provider may send the patient a bill for no more than the in-network cost-sharing amount.

Also, hospitals and providers offering non-emergency services must be more transparent about the expected costs to uninsured and self-pay patients. Such patients must be offered a good faith estimate of the services or items to be provided if the services are scheduled at least three business days in advance, and significant deviations from these estimates trigger the patient’s ability to contest the total charged.

Hospital and Provider Guide to Processing Bills for Covered Services and Providing Good Faith Estimates:

• Determine the patient’s insurance status and if insured, submit the out-of-network bill directly to their health plan;
• Include in the submission whether the services rendered are covered by the No Surprise Act, along with any patient waiver of their No Surprises Act protections;
• If a patient is uninsured or self-pays, provide the patient with oral and written notice that a good faith estimate of expected charges is available;
• Provide the uninsured or self-pay patient with the good faith estimate;
• For uninsured or self-pay patients, send their bill for services or items provided, and consider keeping a record of whether the estimate was within $400 of the final invoice sent;
• For insured patients, await initial payment from the health plan and notice of the in-network rate for the services rendered; and
• Send the insured patient a bill for their cost-sharing amount based on the in-network rate (and include the disclosure notice if not yet provided to the patient).