No Surprises Act Brings New Billing Rules, Disclosures; Doctors Sue

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Key provisions of the No Surprises Act took effect January 1, and with it comes new billing limits for psychiatrists providing emergency and hospital-based care to insured patients at network facilities. The regulations also impose new paperwork rules to clinicians offering office-based care to uninsured or self-pay patients.

The law was intended to protect insured patients from large bills that can arise when they receive care from out-of-network doctors they did not choose, such as in an emergency or for a surgical procedure. Last year, federal agencies published two interim final rules and another proposed rule to implement the law.

First, when patients receive hospital or emergency care at their plans’ network facilities, the regulations prohibit plans from charging patients more than in-network rates. In these cases, out-of-network physicians may not bill patients more than the network cost-sharing amount allowed by their plans. The regulations set a penalty of up to $10,000 for each violation.

The federal government estimates that patients with private insurance make 40 million emergency visits a year. Prior to this law, 18% involved at least one surprise medical bill.

The regulations establish a process for determining the payment amount for surprise medical bills that starts with negotiations between plans and providers. When parties cannot agree, the regulations create an independent dispute resolution (IDR) process.

Physician and hospital groups filed a lawsuit in federal court last December saying the IDR unfairly benefits insurance companies and gives them incentive to keep payments to network physicians low.

New Disclosure Rules for All Doctors

When providing office-based care, psychiatrists and other clinicians are excluded from the new rules that govern the amount of the bill. However, the regulations now require them to provide all uninsured or self-pay patients a “good faith estimate” of expected charges. Such estimates must be provided whenever services are scheduled or whenever a patient requests one. The rule applies to current and future patients alike. For now, the fee disclosure rule does not pertain to patients who intend to submit a claim to their health insurance plan. However, the rule is expected to apply to all patients in the near future as more rules are rolled out.

Physicians’ fee estimates must be in a written document that is clear, understandable, and prominently displayed, according to the regulations. Physicians must also post a notice on their website informing patients of their right to a good faith estimate. The Centers for Medicaid and Medicare Services (CMS) has created a template for both disclosures.

The regulations establish a new patient-provider dispute-resolution process for cases in which the billed charges exceed by $400 or more the good faith estimate. If negotiations don’t succeed, a new independent dispute-resolution process may be initiated.

Details of Lawsuit

What happens when plans and physicians providing emergency or hospital-based care at in-network facilities cannot come to terms on payments? The regulations specify that when disputes arise, the payment should be based on health plans’ median rate paid to in-network providers in their geographic area.

Physician and hospital groups say this interpretation of the law upends the careful compromise Congress deliberately chose for resolving billing disputes, according to a statement issued by the AMA and American Hospital Association (AHA). In the lawsuit filed against the federal government last December, the groups charged that the law unfairly limits consideration of other factors—and benefits commercial health insurance companies.

“The lawsuit argues that the regulations are a clear deviation from the law as written and all but ensure that hospitals, physicians, and other providers will routinely be undercompensated by commercial insurers, and patients will have fewer choices for access to in-network services,” according to the joint AMA/AHA statement.

A bipartisan group of 152 lawmakers urged the administration to return to the original language of the No Surprises Act. That law advised arbiters to consider other factors besides median in-network rates, such as provider training, quality of outcomes, complexity of services rendered, as well as hospitals’ teaching status, case mix, scope of services, and demonstrations of previous good faith efforts to negotiate in-network rates.

The law’s current approach “is contrary to statute and could incentivize insurance companies to set artificially low payment rates, which would narrow provider networks and jeopardize patient access to care—the exact opposite of the goal of the law,” lawmakers wrote in the letter. “It could also have a broad impact on reimbursement for in-network services, which could exacerbate existing health disparities and patient access issues in rural and urban underserved communities.” ■