What employers should know about the No Surprises Act in 2022

Two female Highmark health insurance staffers (one white, one black) discussing the no surprises act.

The No Surprises Act passed in 2020 and went into effect on January 1, 2022. For millions of people with health insurance plans, this is a welcome change that eliminates surprise bills for out-of-network health care services. For employers who sponsor group health plans, it’s important to understand the benefits of the new legislation and how it will affect your plan and your beneficiaries.

The financial and emotional burdens of surprise billing in health care

The billing process for health care services has long been a source of frustration and concern for many. The amount a person is billed fluctuates dramatically based on their insurance coverage and network of providers and facilities, as well as deductibles, copays, coinsurance, and out-of-pocket maximums.

Prior to the passage of the No Surprises Act in 2020, millions of Americans were subject to balance billing — sometimes called surprise billing — for out-of-network services. In a 2020 Peterson-Kaiser Family Foundation study that examined surprise billing data from 2017, 39% of Americans with health insurance said they had received an unexpected medical bill in the prior year. 

That’s no surprise, given the number of clinic and hospital visits subject to surprise billing. The study found that 18% of all emergency visits and 16% of all in-network hospital stays for people in a large employer plan had at least one out-of-network charge. Two common scenarios include those who:

  • Received care at an emergency room or urgent care facility outside their plan network (sometimes without being consulted or without the ability to choose).
  • Received care at an in-network hospital from an out-of-network provider (for example, an anesthesiologist whom the patient does not choose).

The financial burdens of these surprise bills are not only borne by consumers. Another study published in Health Affairs found that eliminating balance billing would lower payments from private insurance to physicians by 13.4% and reduce health care spending for beneficiaries on employer-sponsored health plans by about $40 billion a year. Eliminating surprise billing could significantly lower annual health plan costs for employers as well as patients.

What changed: A No Surprises Act summary

Prior to the passage of the No Surprises Act, state laws regulating surprise billing varied significantly, and there was no federal law to prohibit or curb this practice. Beneficiaries on Medicare or Medicaid already had many of these protections in place, and CMS does provide resources to help people understand balance billing consumer protections.

The No Surprises Act guarantees specific protections for patients who need: 

Emergency care

People who go to an out-of-network facility for emergency care can only be charged the rate for their plan’s in-network cost-sharing amounts (copays and coinsurance). Emergency or urgent care facilities cannot send a balance bill for any additional services or costs. These protections extend to any care after a patient is in stable condition unless they consent in writing to waive the protection.

What does this look like? Consider a person who, prior to 2022, experienced chest pain and shortness of breath while visiting family in another state. He couldn’t choose an in-network facility because there were none nearby, so he chose the nearest emergency room and received a $5,000 bill that was not paid by his insurance.

Under the No Surprises Act, the hospital cannot bill this patient for out-of-network care. Instead, they must negotiate specific payment with his insurance. He will only owe whatever he would pay for the same care at an in-network facility (for example, a $150 copay and 20% coinsurance, up to his out-of-pocket maximum). 

In-network care at a hospital or ambulatory surgical center

When people get care from an out-of-network provider at an in-network facility, the provider can only bill for the plan’s in-network amounts. The law specifies that this extends to all hospital services, including:  

  • Anesthesia
  • Assistant surgeons, hospitalists, and intensivists
  • Emergency medicine
  • Laboratory, pathology, and radiology
  • Neonatology

When the No Surprises Act doesn’t apply

There are some situations where the No Surprises Act will not prevent balance billing. If a patient signs a written consent waiving their right to these protections, the hospital or health care facility can still bill at an out-of-network rate. The facility must provide this cost information in writing in English and the 15 most common non-English languages spoken in their state or provide a qualified interpreter for patients with limited English proficiency. In all cases, a signature is required; verbal consent is not sufficient.

The No Surprises Act does limit surprise billing for air medical transport by creating methods to calculate a qualifying payment amount (QPA) for this type of emergency care. However, the law does not apply to ground ambulance trips. HHS created an advisory committee to study ground ambulance billing and has recommended options to protect people from surprise ambulance bills. In the meantime, patients can still get billed for out-of-network ambulance charges.

What employers with group health plans need to know about the No Surprises Act

The No Surprises Act protects individuals covered by, and the issuers of, group health insurance plans. That includes:

  • Private large- and small-employer group plans subject to ERISA.
  • Non-federal government plans, such as those that cover state or local government employees.
  • Federal employees on health benefit plans.
  • Tax-exempt plans issued for employees of qualified church groups.

Employers should clearly communicate the protections of this new law to beneficiaries. Many Americans may not be aware that they no longer have to pay some surprise medical bills, and that there are steps to take to get one resolved.

The law also aims to increase consumer price transparency. That includes providing clear and simple tools for online price comparisons. Out-of-network providers must offer a good faith estimate before administering care that captures — to the best of their knowledge — all the charges the patient is likely to incur. The estimate must be in writing in a language the patient can understand (or the facility must provide a qualified interpreter).

Help your plan participants understand how to access these tools and compare costs. As people decide to choose more cost-effective care, this can save them money and lower total plan costs over time.

In addition to significant consumer protections, new rules that go into effect in 2022 require health plans to disclose important information about their own processes and fee schedules that might impact health plan and coverage costs. Employers can now find out how much direct and indirect compensation they paid to agents or brokers, if they don’t already know.

Resolving out-of-network claims

The No Surprises Act outlines the process that plan administrators must follow to dispute surprise bills for out-of-network care that exceed the in-network allowable amounts.

The insurance plan must calculate the allowable amount based on how much it would pay for the same care with an in-network provider or facility, including any cost-sharing from the patient (such as copays or coinsurance). Out-of-network providers and facilities have 30 days to dispute this amount and enter open negotiation with a clearly defined dispute resolution process.

Staying updated on the changes

New laws often take time to implement, usually with some confusion along the way. Highmark Health plan advisors can help you understand the No Surprises Act and navigate any new situations as they come up.

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