What Does the ‘No Surprises Act’ Mean for Patients?

By Wendy F. Pongracz, Jim Beall, Susan Bahme Blumenfeld, and Kelly Ann Brogan

On December 27, 2020, the Consolidated Appropriations Act, 2021 (CAA) was signed into law. The CCA includes the No Surprises Act (the “Act”), which provides, among other things, protections for patients and their families against balance bills from non-network providers for emergency treatment and for some non-emergency care. (Balance bills are bills for the difference between the amount a health plan pays and the amount a non-network provider charges.)

The Act’s changes cover most health plans, but regulatory guidance is needed to clarify the Act’s applicability. The Act appears to apply to both grandfathered and non-grandfathered plans. The focus of this blog post is the protection offered to patients covered by group health plans, including collectively bargained health and welfare funds.

The No Surprises Act changes will be welcomed by patients who have received bills from non-network emergency providers resulting in patient liability of thousands of dollars. The Act also protects against surprise charges from non-network providers who provide services in a network facility. And, the No Surprises Act provides special protection against patient liability for air ambulance bills (although not ground ambulance bills). Most of the provisions of the Act are effective for plan years that begin on and after January 1, 2022. Please see below for a few examples.

Emergency Services from a Non-Network Provider.

Example: Jake has health benefits coverage under the Blue Bell Trucking Group Health Plan. He takes the family for a day’s skiing at a local ski hill. His 12-year-old son, Ricky, takes a bad fall, breaking his collar bone and perhaps suffering damage to his shoulder. Ricky is taken by ground ambulance to the nearest hospital, a non-network facility.

UNDER EXISTING LAW

UNDER THE NO SURPRISES ACT

Because it is an emergency, Jake’s health plan pays the non-network facility the same as it would pay a network facility. And, Jake pays the same deductible, copayment and coinsurance for the emergency room services as he would with a network provider. But, two weeks later, Jake gets a bill from the non-network hospital for $6,000, the difference between what Jake’s plan pays and what the non-network hospital charges. Even after paying his deductible, copayment and coinsurance, Jake is stuck with a $6,000 bill.

Jake is responsible to pay the non-network facility only the same deductible, copayment and co-insurance as he would have paid to a network facility. If there is a dispute about the amount Jake’s health plan will pay for the service, the health plan and the non-network provider will take the matter to “independent dispute resolution.” Once Jake pays the deductible, copayment and coinsurance required under his health plan, he has no further responsibility to the non-network hospital.

Emergency Transportation Via Air Ambulance.

UNDER EXISTING LAW

UNDER THE NO SURPRISES ACT

Jake’s health plan pays $5,000 for the air ambulance, in accordance with a national claims database, and Jake pays the deductible, copayment and coinsurance ($500) required under his health plan. The air ambulance company, however, charges $38,000 for the service, billing Jake for the entire balance of $32,500. When Jake tries to make a payment plan, the air ambulance company refuses to lower the rate. Jake owes $32,500 and has his account turned over to a collection agency.

Jake is responsible to pay the air ambulance company only the same deductible, copayment and coinsurance required by his health plan. If there is a dispute about the amount Jake’s health plan will pay for the service, the health plan and the air ambulance company will take the matter to “independent dispute resolution.” Once Jake pays the deductible, copayment and coinsurance required under this health plan, he has no further responsibility to the air ambulance company. (This protection applies only to air ambulances, not ground ambulances.)

Non-Network Provider of “Ancillary” Services in Network Facility.

Example: Jake has health benefits coverage under the Blue Bell Trucking Group Health Plan. He takes the family for a day’s skiing at a local ski hill. His 12-year-old son, Ricky, takes a bad fall, breaking a leg and possibly suffering serious head injuries, rendering him unconscious. Ricky is taken to a regional network hospital. After he is stabilized, the attending physicians determine that he requires surgery to relieve swelling in his brain, urgent but not an emergency. While the neurosurgeon, neurologist, and orthopedic surgeon are all network physicians, the anesthesiologists who service the hospital are all part of a non-network group.

UNDER EXISTING LAW

UNDER THE NO SURPRISES ACT

Although Jake’s health plan paid the network rate to the anesthesiologist, and Jake paid his plan’s deductible, copayment and coinsurance, Jake received a balance bill of $1,800 from the anesthesiologist for which he is responsible.

Under the No Surprises Act, anesthesia services are considered “ancillary” services. Jake is responsible to pay the anesthesiologist the same deductible, copayment and coinsurance required by his group health plan. If there is a dispute about the amount Jake’s health plan will pay for the anesthesia service, the health plan and the anesthesiologist will take the matter to “independent dispute resolution.” Once Jake pays the deductible, copayment and coinsurance required under this health plan, he has no further responsibility to the anesthesiologist.

Non-Network Non-Ancillary Services in a Network Facility.

Example: Jake has health benefits coverage under the Blue Bell Trucking Group Health Plan. He takes the family for a day’s skiing at a local ski hill. His 12-year-old son, Ricky, takes a bad fall, breaking a leg and possibly suffering serious head injuries, rendering him unconscious. Ricky is taken to a regional network hospital and receives the required emergency treatment. Following his discharge, Ricky requires plastic surgery to repair the injuries to his face. Although network plastic surgeons are available at a local network hospital, Ricky’s parents decide that they would rather use a uniquely skilled plastic surgeon who is able to operate in the network hospital but who is a non-network provider.

UNDER EXISTING LAW

UNDER THE NO SURPRISES ACT

Jake will be responsible for the difference between the amount his health plan will pay and the non-network provider’s fee. Also, Jake may or may not be able to learn in advance of the surgery what the surgeon will charge and what his health plan will pay.

Jake will be responsible for the non-network provider’s fee, even if it is in excess of the payment the plan will make. However, when the procedure is scheduled, the provider must provide in advance a good-faith estimate of the expected charges for providing the service. And, after his health plan gets notice from the provider or the hospital of the estimated charges, the plan must provide an Advance Explanation of Benefits (EOB) showing what the plan will pay and the deductible, copayment and/or coinsurance that Jake will need to pay.

Continuity of Care Where Employer or Plan Changes Insurance Carriers.

Example: Jake has health benefits coverage under the Blue Bell Trucking Group Health Plan. He takes the family for a day’s skiing at a local ski hill. His 12-year-old son, Ricky, takes a bad fall, suffering a compound fracture of his left ankle and suffering serious head injuries. Ricky required both emergency surgery and follow-up surgical procedures that continued over the course of two years. Jake mentions to co-workers that Ricky’s final surgeries will be coming up in the next few weeks. His co-workers tell him that they heard that the health plan is going to change insurance carriers and that it is possible that not all of Ricky’s surgeons are in the new carrier’s network.

UNDER EXISTING LAW

UNDER THE NO SURPRISES ACT

Jake’s health plan is not required to notify him in advance of the changes. And, although Jake can request that the plan arrange for the new carrier to provide benefits for the final surgeries, the plan is not required to ensure coverage of these claims for services of providers no longer in the network.

Assuming that Ricky meets the Act’s definition of a “continuing care patient” (which includes patients undergoing a course of treatment for a serious or complex condition, etc.), Jake’s health plan is required to provide advance notice of changes in the network status of providers and facilities. Jake will have up to 90 days of continued coverage at in-network cost sharing for Ricky’s treatment to allow for a transition of care to a network provider.

Our Employee Benefits attorneys provide legal services in connection with the establishment and maintenance of a wide variety of pension, profit sharing, health and welfare, severance, training and education plans, for public and private, single and multi-employer funds. Contact us today at 215.656.3600.

People

Related Practices