Breaking down the No Surprises Act

On January 1st 2022, U.S. Congress passed the No Surprises Act, banning surprise medical bills.

Surprise Medical Bills can be a costly and frustrating issue for many Americans. Patients often experience these bills from out-of-network providers who are unexpectedly involved in their care. For example, patients may seek treatment at a hospital that accepts their insurance, but then receive treatment from an emergency department physician who does not. These doctors usually charge far higher fees than health plans typically pay to their patients.

Scenarios like this are all too common. According to research from HealthAffiars.org, as many as one in five emergency room visits result in these types of surprise bills. Patients often pay for health providers they cannot select themselves, such as anesthesiologists, emergency room physicians, and ambulance services.

However, these surprise bills became illegal when the No Surprises Act took effect on January 1, 2022. So, HR leaders of America, what should you know about the new regulations?

What is the No Surprises Act?

The No Surprises Act prevents surprise medical bills from being sent to health plan members. Most frequently, these surprise bills arise when patients receive emergency or routine medical care from out-of-network (OON) providers. These bills may also come from services received from ambulance providers that are not contracted in health plans. This bill creates a dispute resolution system for plans and providers to resolve payment disputes—health providers cannot charge patients directly but must work with insurers to develop fair rates.

What qualifies as a “surprise” medical bill?

A copayment, coinsurance, or deductible may be due when you visit any physician or health care provider in-network. However, you may be subject to additional costs or be responsible for the entire bill if you visit a provider or a facility outside your health plan’s network.

The term “out-of-network” refers to providers and facilities that do not have contracts with your health plan. Out-of-network providers may be able to charge you for the difference between what your plan will cover and what the service will cost. This process is called balance billing. You might not count this amount toward your annual out-of-pocket limit since it is likely more than your in-network costs.

“Surprise billing” refers to an unexpected balance bill. For example, it may happen when you cannot control your care provider. Taking emergency care or receiving treatment from a provider out of network at a clinic in your network would be a good example.

How will this affect me as both an HR leader and as a consumer?

When anyone needs medical care, the last thing on their minds should be fear of unexpected, exorbitant medical bills. Sadly, this can happen when patients are unknowingly treated by providers outside their health plan networks.

As HR leaders, there are some things you’ll need to know regarding billing (both in, and out of network) associated with this new act. And as consumers and potential future patients, there are some things you should know about your rights and how this act can affect you.

1. The regulation bans surprise billing for emergency services. This means regardless of whether emergency services are provided in a hospital or an independent freestanding emergency department, the patient must receive care on an in-network basis without requirements for prior authorization.
2. When patients receive out-of-network ancillary care at an in-network facility, it must be treated as an in-network service. They must charge you the in-network rate. For example, during surgery at an in-network hospital, though the anesthesiologist may be out-of-network, Patients can’t get a surprise bill for that service.
3. Healthcare providers and facilities must use understandable language. Providers must communicate clearly and obtain approval before providing and billing for out-of-network care.
4. The regulations do not prevent patients from receiving care from their preferred providers. A patient may consent to pay at a higher out-of-network rate for care.

The overarching goal is to protect Americans from unexpected and financially painful out-of-pocket expenses. You and your employees have the right to know your healthcare costs ahead of time. It is the patient’s right to receive financial information, including, but not limited to, information on available financial resources for their treatment. In addition, it is the patient’s right to receive an estimate of their treatment costs upon request.

At Nayya, we believe that all Americans have a fundamental right to transparency and understanding when it comes to their health and financial wellness. The No Surprises Act is a great first step in a series of reforms to achieve financial and health equity and protect patients from surprise medical bills.