The federal No Surprises Act (the Act), which was signed into law Dec. 27, 2020, as part of the Consolidated Appropriations Act of 2021, ensured that all Americans had protection from surprise medical billing/balance billing when using out-of-network providers or facilities under certain circumstances. On July 1, 2021, the Biden administration released a series of regulations to implement the Act, which includes rules from the U.S. Departments of Health and Human Services, Treasury, Labor and the Office of Personnel Management (the Rules). The Rules are categorized as an “interim final rule with comment period,” meaning that they are mostly final, but some adjustments may be made based on comments submitted by stakeholders. Most of the Rules go into effect Jan. 1, 2022. The Rules cover all ERISA plans, all Affordable Care Act (Obamacare) individual and group plans, and Federal Employee Health Benefit Plans. 

Substantive Requirements. The Rules address some, but not all, provisions of the Act. (More regulations will be issued in the future.) Important features include:

• Surprise billing for emergency services is banned; emergency services must be treated like in-network services and preauthorization may not be required. 

• Out-of-network cost-sharing for emergency and certain non-emergency services provided at an in-network facility cannot be higher than if the services were provided by an in-network provider, with coinsurance and deductibles based on in-network rates.

• Out-of-network charges for anesthesiologists and other ancillary care at in-network facilities are banned in all circumstances. 

• Out-of-network charges may not be imposed without advance notice of estimated charges and the consent of the patient to receive out-of-network care. 

• Providers and facilities must post on their website and provide to individuals a consumer notice listing: any requirements applicable to the provider/facility regarding its obligation to update provider directory information with health plans with which it contracts or terminates participation; any state balance billing limitations; and how to contact state and federal agencies if someone believes the provider or facility has violated the requirements in the notice. 

The Rules further provide that the total amount to be paid to the provider or facility must be based on one of the following: an amount determined by an applicable All-Payor Model Agreement (APMA) under Section 1115A of the Social Security Act; if no APMA applies, an amount determined in compliance with State law; in the absences of an applicable State law, an amount agreed upon by the plan or issuer and the provider or facility; if none of the above applies, then an amount determined by an independent dispute resolution (IDR) entity. Rules regarding IDR will be published at a later date. 

Import. The Act and the Rules will likely adversely affect physicians and other providers that have opted to use an “out-of-network” strategy to maximize billing, especially those who provide services at an in-network facility: it will be much harder to balance bill patients. In fact, for emergency services, balance billing is prohibited. For those providers who have struggled to obtain in-network contracts, the Rules may provide a pathway to reimbursement, albeit at times an arduous one if IDR is required. Consumers, however, will benefit the most: They will not have to make the choice between forgoing medically necessary care and facing unknown costs of out-of-network bills. 

DISCLAIMER: This article is for information purposes only and does not constitute legal advice. You should contact your attorney to obtain advice with respect to your specific issue or problem.

Ms. Jackson is a shareholder in the Health Care Practice Group of Brown & Fortunato, P.C., which is headquartered in Amarillo, Texas, and serves healthcare providers nationally. She is licensed in both Pennsylvania and Texas and maintains an office in the greater Pittsburgh area. She may be reached locally at (724) 413-5414 or bjackson@bf-law.com. Her firm’s website is www.bf-law.com.

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Beth Anne Jackson, Esq.

Ms. Jackson is a shareholder in the Health Care Practice Group of Brown & Fortunato, P.C., which is headquartered in Amarillo, Texas, and serves health care providers nationally. She is licensed in both Pennsylvania and Texas and maintains an office in the greater Pittsburgh area.