AMARILLO, TX – Starting January 1, 2022, one of the most extensive consumer/patient protection laws in health care since the Affordable Care Act will take effect. On the first day of the new year, health care providers and commercial insurance companies must comply with the new requirements enacted under the “No Surprises” Act and the regulations implemented by the governmental agencies tasked with its enforcement (collectively, “the Act”). The new requirements include new patient disclosures and billing procedures that aim to protect patients from “surprise bills” that can be financially devastating. The new requirements differ slightly depending on whether the provider is furnishing emergency or non-emergency services. It is vital that health care providers, including DME suppliers, understand the new requirements implemented by the Act to ensure that billing practices remain compliant with federal law.
According to the Centers for Medicare & Medicaid Services (“CMS”), the Act will:
- Ban surprise billing for emergency services. Emergency services, even if they are provided out-of-network, must be covered at an in-network rate without requiring prior authorization.
- Ban balance billing and out-of-network cost-sharing (such as out-of-network co-insurance or copayments) for emergency and certain non-emergency services. In these situations, the consumer’s cost for the service cannot be higher than if these services were provided by an in-network provider, and any coinsurance or deductible must be based on in-network provider rates.
- Ban out-of-network charges and balance billing for ancillary care (e.g., by an anesthesiologist or assistant surgeon) by out-of-network providers at an in-network facility.
- Ban certain other out-of-network charges and balance billing without advance notice. Health care providers and facilities must provide consumers with a plain-language consumer notice explaining that patient consent is required to receive care on an out-of-network basis before that provider can bill the consumer.
The Act also includes protections for uninsured or “self-pay” patients. CMS intends to provide protection so that all patients will “know how much their health care will cost before they get it, and … help them if they get a bill that’s larger than expected.”
The Act identifies and targets “surprise” billing occurring in three instances:
- When a patient receives specified emergency services. The “surprise” occurs because patients often do not have a choice when their life is on the line in an emergency. Often unconscious or otherwise unable to make rational decisions, the patient is taken to the nearest provider to save his/her life. The Act protects patients who find themselves in need of emergency services from being surprised by an expensive bill resulting from their receipt of care from an out-of-network facility.
- When a patient receives non-emergency services at a facility that is in-network but one or more providers rendering the care are out-of-network. This situation most often occurs with an ancillary provider, like an anesthesiologist, working at an in-network facility. Generally, patients choose their primary care provider, but they typically lack choice in the secondary providers such as an anesthesiologist. The Act protects patients from a surprise expensive bill from an out-of-network provider when the patient is receiving services at a facility that is in the patient’s network. To preserve patient choice, the provider may allow an out-of-network provider to render care at an in-network facility and may bill at the out-of-network rate for those services, if the provider complies with the notice and consent procedures spelled out in the Act and in the rules implemented under it.
- When a patient receives emergency air ambulance services. Like emergency services, patients often lack meaningful choice when receiving air ambulance services. The expediency of the patient’s situation, and the limited care options to choose from can make air ambulance services prohibitively expensive and burden the patient with a massive bill.
This article summarizes the background of the Act and highlights some of the important changes and requirements all providers need to be aware of beginning January 1, 2022.
The Act was passed as part of the Consolidated Appropriations Act on December 27, 2020. Its prohibitions and requirements go into effect on January 1, 2022. The Act requires a series of rules to be implemented by the various departments charged with its enforcement. So far, in addition to the statutory requirements, federal agencies have implemented rules in accordance with the Act’s requirements. These include (1) an executive order by the President to prioritize implementation of the Act to encourage competition in the American economy; (2) an interim final rule published July 1, 2021, taking effect January 1, 2022, governing how health plans must cover and reimburse emergency services; (3) an interim final rule issued on September 30, 2021 and taking effect January 1, 2022, implementing dispute resolution procedures for disputes between health plans and providers and establishing other protections for uninsured individuals; and (4) an interim final rule published on November 17, 2021 and taking effect January 1, 2022, establishing new requirements for health plans reporting prescription drug and health care spending information.
The Act directs the Secretary of Health and Human Services (“HHS”), Department of Treasury, and the Department of Labor to implement various rules, so we expect additional rules will be forthcoming. They will be addressed in future articles.
Medical debt is a widespread and growing problem that many Americans face. The Act puts the onus on providers to identify whether or not each of the providers that will provide services are in the patient’s network. “Beginning in 2022, patients will only be required to pay cost sharing based on in-network rates for certain out-of-network emergency services, out-of-network non-emergency services at in-network facilities and out-of-network air ambulance services.” The Act separates emergency services from non-emergency services and specifies various requirements providers must meet for each. The rationale behind the distinction is that patients receiving emergency services are much less likely to be able to evaluate whether a provider is in or out of network and make a decision about whether or not to receive care.
New Requirements that Providers Must Comply With
Billing patients at out-of-network rates will be prohibited beginning on January 1, 2022, for certain out-of-network emergency services. Billing patients at out-of-network rates for out-of-network non-emergency services at in-network facilities will also be prohibited unless the provider complies with notice and consent procedures spelled out in the Act. Billing at out-of-network rates for air ambulance services is also prohibited. This is not all bad news for providers because the Act requires health plans to cover emergency services at an in-network rate without requiring prior authorization. The interim rules contain methodologies that dictate how reimbursement rates for emergency services must be calculated by health plans. These requirements aim to resolve the battle between health plans and providers on reimbursement of emergency services in which out-of-network patients often are used as leverage.
All health care providers will need to update their patient intake forms and disclosure documents and update their public websites with a notice (one page) of the balance billing prohibitions under the Act and any applicable state law requirements regarding billing for health care services. CMS released a model disclosure with instructions for its use at www.cms.gov/nosurprises.
Beginning January 1, 2022, when receiving emergency care, a patient can only be required to pay the in-network cost sharing amount for emergency services received in a hospital, freestanding emergency department or urgent care center that is licensed to provide emergency care. These protections cannot be waived by the patient.
Emergency services include services rendered after the patient is stabilized and as part of an inpatient or outpatient stay. The Act specifies that three criteria must be met for the emergency situation to be considered over:
- The provider determines that the patient is able to travel using non-medical transportation or non-emergency transportation.
- Notice and consent procedures are met.
- The individual is in a condition to receive information and provide informed consent.
HHS may implement additional measures to determine whether an emergency has ended.
The Act’s practical effect on the provision of emergency services will be to strengthen the bargaining power of the provider against health plans for which it is out-of-network because a health plan that provides emergency coverage must provide that coverage without prior authorization, without regard to whether a facility is in-network or out-of-network, and regardless of other terms of the plan.
Balance billing for non-emergency services rendered at an in-network facility is prohibited; but, unlike the rules that apply to emergency services, the Act allows the patient to waive these protections if the provider complies with notice and consent procedures stated in the rule. These requirements include providing the patient with a rule-compliant written notice and obtaining the patient’s written consent to receive services from an out-of-network provider at the in-network facility.
In addition to the new mandatory notice of the patient’s rights, providers should adjust their intake procedures to inquire with each patient whether or not he/she intends to request that the services received be reimbursed by a health plan or if the patient intends to pay for the care himself/herself.
The provider must:
- Inquire as to the patient’s insurance coverage and whether the patient will seek to have a claim submitted to the insurer.
- In the event the patient will submit a claim to insurance, send a good-faith estimate of the expected charges and the expected billing and diagnostic codes to the patient’s health plan.
- In the event the patient is not enrolled in a health plan and not a member of a federal health care program, provide a good-faith estimate of the expected charges and the expected billing and diagnostic codes.
The Act sets a timeline for this to be completed which starts at the time the patient makes an appointment. If the appointment is scheduled more than 10 days in advance, the provider must take the steps described not later than three days after scheduling. If the appointment is scheduled at least three days (but less than 10 days) in advance, the provider must complete the steps within one day of scheduling.
What Does this Mean for DME Suppliers?
DME suppliers that have agreements in place with providers in which the supplier places inventory at a hospital or physician’s office (i.e., a “consignment closet” or “equipment placement” arrangement) should reevaluate those agreements to ensure the agreements comply with the new requirements of the Act.
Generally, the provision of DME will fall within the Act’s definition of “non-emergency services.” The Act will come into play in the event the DME supplier’s consignment closet is located in a facility that is in-network while the DME supplier is out-of-network. When this occurs, the Act prohibits the DME supplier from billing the patient an amount that is more than the in-network cost-sharing requirement for the item or service. Because the Act puts the onus on providers of non-emergency services to notify the patient and obtain written consent to provide items or services by an out-of-network provider, failure to comply with the notice and consent procedures will force the provider to accept the copayment amount allowed under the patient’s plan.
To avoid being bound to the reimbursement and cost-sharing amounts under the patient’s health plan, the DME supplier must provide notice and obtain consent to bill as an out-of-network provider, allowing it to bill the patient as an out-of-network provider if it meets the following requirements:
- 72 hours prior to the time the item is furnished (or if the appointment is made by the patient less than 72 hours in advance, then the same day the appointment is scheduled), the DME supplier provides the patient a written notice that, in plain language, informs the patient of the following:
- Receiving such items and services from a nonparticipating provider or nonparticipating facility is optional and the participant, beneficiary, or enrollee may, instead, seek care from a participating provider or at a participating facility.
- The DME supplier is a nonparticipating provider. The notice must contain a list of any participating providers at the facility that can furnish items.
- A good-faith estimate of the cost of the item or service to be furnished.
- The patient signs the written consent form and is provided with a copy of the signed consent form.
- The DME supplier retains this consent form for at least seven years.
Implementation of the Act is ongoing and additional guidance and rulemaking should be expected. It remains to be seen how the new protections will work in practice. Additional amendments to these rules and regulations are inevitable.
DME suppliers should prepare to comply with the Act because noncompliance carries stiff penalties; as much as $10,000 per violation can be applied to providers and facilities. DME suppliers that have consignment closet arrangements in place with other providers need to take the following actions to ensure full compliance with the requirements that take effect January 1, 2022:
- Contact providers with whom the DME company has an arrangement and determine whether the provider is in-network with any plans that the DME supplier is not.
- As necessary, update the arrangement to ensure that the provider at the facility is furnishing appropriate documentation to patients such that notice and consent requirements are met.
- Update intake forms and other paperwork to ensure compliance with the Act.
Practically speaking, in a consignment closet scenario, a DME supplier should be prepared to charge in-network rates for any patient who does not receive prior notice of a supplier’s out-of-network rates where it is impossible for that supplier to receive prior patient consent.
Kelly T. Custer, JD, is an attorney with the Health Care Group at Brown & Fortunato, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies, and other health care providers throughout the United States. Custer can be reached at (806) 345-6343 or firstname.lastname@example.org.
Matthew D. Earl, JD, is an attorney with the Health Care Group at Brown & Fortunato, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies, and other health care providers throughout the United States. Earl can be reached at (806) 345-6360 or email@example.com.