How The No Surprises Act Seeks to Change Surprise Billing

The No Surprises Act used a couple of methods to reduce surprise billing, though the need for some modifications may remain, according to a resource from AHIP.

“The real problem of surprise medical bills tended to be concentrated among certain medical specialties where the providers are likely to (a) charge substantially more than their peers in other specialties and (b) not accept private insurance,” the resource explained.

Care from anesthesiologists, emergency medicine physicians, pathologists, and radiologists was most likely to result in a surprise medical bill, with each of these specialties charging, on average, four times the Medicare reimbursement rate or more.

The No Surprises Act instituted incentives for hospitals and healthcare professionals in these fields to participate in a health plan network, instead of resorting to balance billing for higher pay. Prior to the No Surprises Act, providers who were outside of a health plan network could charge higher rates for out-of-network healthcare services.

Joining a health plan network means that providers have to align with quality of care standards. Holding providers to quality standards is another way of keeping members, not only financially safe from surprise billing, but also medically safe from poor quality care.

Meanwhile, health insurers cannot settle for a small number of contracts with no attention to accessibility. Federal and state regulations mandate that insurers maintain network adequacy. In general, this means that health plans have to offer network options that are within a reasonable, accessible distance from the patient.

The No Surprises Act has a farther reach than previous, state-driven efforts to regulate surprise billing. The Act covers both the group health insurance marketplace and the individual health insurance marketplace, protecting members from surprise billing and balance billing in emergency services, out-of-network services at in-network facilities, or out-of-network air ambulance services.

When situations arrive in which a patient receives care from an out-of-network provider, the patient pays the in-network rate and the rest is negotiated via independent dispute resolution between the payer and provider. This involves the health plan making an initial payment, which might resolve the bill simply and cleanly. 

However, if the provider seeks greater reimbursement, the provider and health plan may engage in up to 30 days of negotiation, after which—if the matter remains unresolved—the parties may submit their final offers to a certified independent dispute resolution entity that makes the final call.

The independent dispute resolution entity will take into consideration the qualifying payment amount (or market rate), the good faith efforts of both parties to find a resolution, market shares, patient acuity, and facility-specific factors including but not limited to the provider’s training, teaching status, and case mix. However, strong emphasis is placed on the qualifying payment amount.

“Similar to other federal laws, the No Surprises Act supplements existing state law, rather than replacing them,” the resource stated. “The No Surprises Act acts as a ‘floor’ for consumer protections against surprise bills from out-of-network providers and related higher cost-sharing responsibility for patients.”

The regulation is still being shaped. New regulations around the independent dispute resolution process will come out in the summer of 2022.

“Work remains in state legislatures and in Congress to protect patients in all possible care scenarios,” the resource concluded. “The No Surprises Act should correct underlying market failure – the lack of incentive for some providers to not participate in health plan networks – so that consumers have more access to high quality providers without any need to worry about a surprise medical bill.”