A patient comes in for knee surgery. The surgery is performed at the in-network hospital by an in-net-work orthopedic surgeon – meaning both the hospital and the surgeon are included in the patient’s insurance network. However, an out-of-network provider performs the anesthesia. Can the patient be billed for this out-of-network anesthesia provider? And what is the financial impact on the patient? The No Surprises Act seeks to clarify the answers to these questions.
Basically, the No Surprises Act prohibits balance billing to the patient. This is called “surprise medical bills.” [Related: See our overview of the No Surprises Act].
So in our example, because the patient came to an in-network hospital and provider expecting to be charged in-network rates, then:
- If the patient did not receive notice and did not consent to have the anesthesia provided by an out-of-network doctor, then generally the patient cannot be billed the additional fees charged by the out-of-network anesthesia doctor.
- If the patient did receive notice and consented to the out-of-network anesthesiologist, the patient can be billed the additional feed.
Before the No Surprises Act, patients could have experienced a significant financial impact. For example, say the usual and customary fee for general anesthesia for this surgery is $1,000. If the patient pays a deductible of $100 and the insurance pays half (or $500 for out-of-network services), under the old rules the patient could be balance billed for the remaining $400 for the out-of-network services.
With the No Surprises Act, the healthcare organization will incur the consequences of these surprise, unbillable charges.
“The ‘No Surprise Act’, protects consumers from the cost of unanticipated out-of-network medical bills by prohibiting billing patients more than the agreed upon in-network rates,” says Jan Elezian of SunHawk Consulting. “Most surprise bills arise when the patient is treated in an emergency and has little or no say in where or who provides them with medical care. The No Surprises Act prohibits balance billing except for cases of non-emergency services when providers give prior written notice at least 72 hours in advance and obtain the patient’s written consent.”
Medicare and Medicaid both prohibit balanced billing. Now, patients outside of those programs may be saved hundreds and even thousands of dollars. The Compliance team can help reduce surprises – protecting their own revenue stream instead of having to write off the balance of these bills. Ultimately, that gives the patient a better customer experience. They avoid unplanned medical bills and they appreciate the accurate information about medical copayments at the time of service.
Protecting consumers from surprise medical bills
According to the Department of Health and Human Services (HHS), surprise out-of-network medical bills are a leading cause of unpaid medical bills. Unpayable medical bills are often a source of financial hardship for patients and their families. And unpaid medical bills are damaging for healthcare organizations.
- An estimated one of every six emergency room visits and inpatient hospital stays involve care from at least one out-of-network provider, resulting in surprise medical bills.
- Two-thirds of all bankruptcies filed in the United States are tied to medical expenses and bills.
- A 2019 study by the Government Accountability Office (GAO) found that the median price charged by air ambulance providers ranged from $36,400 to more than $40,000, and over 70% of these transports were furnished out-of-network, meaning most or all costs fell to the patient whether insured or uninsured.
According to HHS, “these provisions will provide patients with financial peace of mind while seeking emergency care as well as safeguard them from unknowingly accepting out-of-network care and subsequently incurring surprise billing expenses.”
Preparing for the No Surprises Act
Compliance professionals are in a great position to help protect consumers from surprise bills and protect the organization from financial risk. Work with your colleagues to be sure they are routinely reviewing registration practices to ensure patients receive notice and consent for out-of-network services, when applicable. You want to be sure your facility’s billing and balance billing procedures comply with the Medicare, Medicaid, and now the No Surprises Act.
Additionally, evaluate or audit balance billing practices once a quarter or twice a year (depending on the size of the organization) to ensure patients are not getting surprise medical bills. In particular, make sure your organization is working toward more consistency in providers being in-network with the same insurers as the organization. And have a plan to communicate to patients and be prepared to write down the balance of “surprise” out-of-network bills, if all else fails.
YouCompli covers some of the steps to consider in our recent blog post: No Surprises Act: Facilitate a smooth rollout.
The No Surprises Act requires healthcare organizations to revise certain procedures related to out-of-network providers. There is good news, though. As you make these updates, you not only comply with federal regulations – you build greater trust with patients and the community as a whole.
YouCompli offers model procedures and management tools that can help you update policies and procedures to comply with the No Surprises Act. Learn more.
Denise Atwood, RN, JD, CPHRM
District Medical Group (DMG), Inc., Chief Risk Officer and Denise Atwood, PLLC
Disclaimer: The opinions expressed in this article or blog are the author’s and do not represent the opinions of DMG.
Denise Atwood, RN, JD, CPHRM has over 30 years of healthcare experience in compliance, risk management, quality, and clinical areas. She is also a published author and educator on risk, compliance, medical-legal and ethics issues. She is currently the Chief Risk Officer and Associate General Counsel at a nonprofit, multispecialty provider group in Phoenix, Arizona and Vice President of the company’s self-insurance captive.