The No Surprises Act was passed in 2020 and went into effect on January 1, 2022. The purpose of the No Surprises Act is to provide protection for those with group or individual health insurance plans against “surprise billing.” These surprises usually come from out-of-network expenses incurred during travel or emergencies.
Insurance companies call this “balance billing,” meaning the patient is required to pay for the balance that the insurer refuses to pay but which the patient was unaware of or unable to avoid at the time. The No Surprises Act was enacted to restrict “balance billing” and require good-faith estimates and public disclosure of costs and billing practices.
The No Surprises Act contains several key elements that doctors and medical facilities must comply with to avoid enforcement penalties:
- They must provide a good-faith estimate of services and costs to uninsured or self-paying patients who request such an estimate.
- They must accommodate an independent dispute resolution process to determine payments between out-of-network providers and health plans.
- They must accommodate a patient-provider dispute resolution process to determine payments between uninsured or self-paying patients and healthcare providers.
- They must provide a way to appeal certain health plan decisions for insured patients.
Enforcement was intended to begin when the No Surprises Act went into effect, but providers immediately had problems meeting all these goals. As a result, enforcement has been delayed.
Who enforces the No Surprises Act?
Many states had protections in place before the No Surprises Act was passed. The new act was written to extend coverage to uninsured patients, provide enforcement to states unable or unwilling to carry out the protection, and create protection for air-ambulance services, which had been restricted to the states by federal law.
The No Surprises Act protects patients from “surprise” or “balance billing” in three specific scenarios:
- Emergency care from an out-of-network provider or facility
- Non-emergency care at an in-network facility by an out-of-network provider
- Emergency transport by an air ambulance service (but not ground transport)
Patients are now assured their costs are restricted to the in-network cost-sharing (such as their deductible or co-pay), and providers may not send the “balance bill” for any costs beyond that amount. The No Surprises Act also extends these protections to uninsured and self-insured patients.
Enforcement is generally assigned to the states unless the state cannot or will not carry out enforcement. Currently, only five states rely exclusively on the federal government for enforcement.
Enforcement was suspended when the American Health Association (AHA) and Center for Medicare and Medicaid Services (CMS) asked for more time, citing requests for guidance and assistance from providers, facilities, and insurers.
No Surprises Act enforcement discretion and delay
One major bottleneck in implementing the No Surprises Act has been the good-faith estimate requirement. This is intended to give uninsured and self-paying patients a complete overview of the possible services and personnel involved in their care before they agree to treatment.
Good faith estimates discretionary period
The AHA and CMS have received numerous requests from their members asking for a further extension on good-faith estimates, citing several serious unforeseen challenges in creating a comprehensive good-faith estimate.
The challenges cited are as follows:
- The No Surprises Act requires providers and facilities to exchange billing information and codes with all co-providers and co-facilities. There is currently no system that allows unaffiliated providers to share information with affiliated providers. In other words, a doctor who treats patients in an in-network hospital cannot provide the hospital with an estimate for treatment; they can only bill after.
- Case management systems do not send bills and invoices to other providers but only to the insurance companies. Compliance with No Surprises Act regulations would require manual input for all estimates, which would likely take more time than the three-day limit set by No Surprises Act.
- There is no standardized system for sharing patient information, treatment codes, and other medical information in the manner required to create the estimate. AHA raised concerns that some of this data-sharing is restricted by HIPAA, hence the need to bill insurers directly.
- Without a standardized, automated system, provider variance and incompatibility between systems will likely lead to errors, additional delay, and increased administrative costs.
The American Health Association (AHA), AMA, and other groups are working to develop technical systems to resolve these issues. They are urging continued suspension of enforcement until such a system can be fully implemented.
Advanced explanation of benefits delay
Advanced explanation of benefits (AEOB) is the follow-up to the good-faith estimate. An AEOB must be provided to a covered individual no later than one business day after receiving the good-faith estimate. It must state in “clear and understandable language” (5 U.S.C. 8901(p) a full explanation of the benefits described in the good-faith estimate received by the patient.
The AEOB must include all the information which was used in creating the good-faith estimate:
- The network status of the provider or facility;
- The contracted rate of the item or service or where the patient can obtain information on in-network providers;
- The good-faith estimate;
- A good-faith estimate of the amount the plan will be paying;
- The amount the patient will be paying via cost-sharing or copay;
- A good-faith estimate of the patient’s plan status on deductibles and out-of-pocket maximums as of the date of the AEOB;
- Disclaimers indicating whether coverage is subject to any other medical management techniques; a statement that this is only an estimate based on information at the time of the request or schedule of the service; and any other disclaimer which seems necessary and appropriate.
On September 16, 2022, a Request for Information (RFI) was submitted by the CMS, Office of Personnel Management (OPM), and Department of Labor (DOL), among others, seeking information from providers and facilities on the implementation of the No Surprises Act and the effects of the good-faith estimate rule and the AEOB requirement.
At the time of the RFI, no regulation had yet been written to address concerns raised by the American Hospital Association (AHA) and American Medical Association (AMA) regarding how information to create the good-faith estimates and AEOBs was to be collected, stored, and maintained.
In a letter to CMS, the AHA and AMA raised serious questions about implementing the No Surprises Act. They requested that any standard developed allow individual providers to submit their own estimates to the insurer to create AEOBs under the same guidelines now used for billing.
The AHA and AMA specifically mentioned concerns in three areas:
- Differences in information to be collected. The letter noted vast differences between providers, forms, and types of information currently gathered in creating an estimate.
- The standard should follow the existing system as closely as possible to utilize existing infrastructure, processes, and training. The AMA and AHA were concerned about the need for extensive retraining and retooling for new processes under discussion.
- AEOB requirements would apply to more than 61% of Americans with commercial health insurance. The one-day requirement for an AEOB would either require an influx of new staff or place unsustainable burdens on the healthcare system to handle the administrative work and continue providing care.
At this time, the final requirements for AEOBs are still pending. The RFI expired on November 15, 2022, and to date, no new guidance has been issued by CMS.
The DOL recommends that all healthcare providers and facilities continue closely monitoring professional agencies and No Surprises Act websites for updates closely.
No Surprises Act Enforcement Date
The No Surprises Act went into effect on January 1, 2022. Enforcement was intended to begin on the same date. The Biden Administration, prompted by the AHA and CMS, extended compliance and enforcement dates to January 1, 2023.
However, on December 2, 2022, HHS released updated guidance indicating that the enforcement discretionary period is being delayed for scenarios where good faith estimates delivered to uninsured (or self-paying) individuals do not include expected charges from co-providers or co-facilities.
No date has been provided for when this new discretionary period is to end.
Why another delay?
According to the HHS update:
HHS has received comments and feedback indicating that compliance with this provision is likely not possible by January 1, 2023, given the complexities involved with developing the technical infrastructure and business practices necessary for convening providers and facilities to exchange GFE data with co-providers and co-facilities. Stakeholders have requested that HHS further delay the enforcement of this provision until HHS has established a standard technology or transaction to automate the creation of comprehensive GFEs and given providers and facilities sufficient time to implement such standards.
Providers, medical facilities, and insurance companies should monitor the situation carefully, and work with their state agencies and professional organizations to develop plans for the future.
The technological concerns cited by the AHA are alleviated as software for complying with the No Surprises Act have started to become commercially available, so providers should not expect further delays are guaranteed.
Current No Surprises Enforcement Actions
Because of concerns from providers, facilities, professional organizations, and government agencies, enforcement has been minimal. The six-month window from startup to full enforcement was optimistic with good intentions.
Ultimately, price transparency and the end of “surprise billing” is in everyone’s best interests. Patients have been clamoring for more insight into healthcare billing practices for a long time, and fears of unpleasant surprises in their bills have led many to make medical decisions they should not have made.
Providers will benefit from improved patient relations and fewer disputed bills. When patients know what their treatment will cost and don’t have to call their attorney when they need to challenge an out-of-network charge, providers will see an improvement in their revenue stream.
Currently, enforcement has focused mainly on insurance plans and their providers. Most states already had “no surprise” laws to handle disputes between patients, providers, and insurance plans. The No Surprises Act has been able to step in and provide oversight for those states with less vigorous enforcement and to provide it in full for states which lacked it.
Enforcement Letters and Legal Action
CMS has provided links to the enforcement letters sent to the governors and insurance commissioners of all states which detail the requirements of the No Surprises Act for each state, and the enforcement steps that CMS will be taking as things move forward. As of November 2022, only Tennessee had not received an enforcement letter.
The site also contains a survey that was sent to the states in 2021, asking for information about their ability to enforce various provisions of the No Surprises Act and comments or concerns about enforcement of the No Surprises Act in their state.
A pending court case, Tex. Med. Ass’n. v. Dep’t of Health and Human Serv., (E.D. Tex., No. 6:22-cv-00372, 9/22/22), is still attempting to sort out what enforcement and dispute resolution will be and how it must be worded. The AMA and AHA both support the Texas Medical Association and believe that the final guidance from HHS too heavily favored insurance companies.
Monetary penalties: the upcoming strong enforcer
Failure to comply with the No Surprises Act can result in steep financial penalties. Insurers can be fined up to $100 per patient per day for “balance billing” in violation of the act. Providers can face monetary penalties of up to $10,000 per violation.
Get ahead of No Surprises Act compliance with MD Clarity
Solutions exist for creating good-faith estimates for patients that are accurate, No Surprises Act-compliant, and don’t leave anything to chance. Although the requirements are time-consuming, they are not complicated if you have the right automation software.
At MD Clarity, we have developed our Clarity Flow software to meet all the No Surprises Act regulations, while still meeting the payment requirements for your patients and providers. To see if we can meet your needs and your patients’ good-faith recommendations, contact us for a free demo.