CMS No Surprises Act: What Patients and Healthcare Payers Need To Know

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The motivation behind the CMS No Surprises Act (NSA) was signed into law in December 2020 with the remainder of its components going into effect at the beginning of 2022. The goal of this act is to increase transparency between healthcare biller and payer, limiting the number of surprise bills you receive for your healthcare.

With the recent roll-out of all aspects of the No Surprises Act, there are some crucial things for healthcare payers to be aware of to be sure that you take advantage of everything this new act offers.

What Does the No Surprises Act Mean to the Patients?

The primary actions of the NSA are to provide consumers federal protections against surprise medical bills and prohibit balance-billing for certain out-of-network (OON) care. In addition, this act drastically changes the billing and reimbursement processes.

It might come as a shock to some individuals just how frequently these surprise bills occur. A KFF poll found that 1 in 3 insured adults between the ages of 18 and 64 were subject to an unexpected medical bill within the last two years. Adding onto this statistic, 16% of those individuals who received a surprise bill claim that their surprise bill was related to care received from an out-of-network provider.

On top of that, the cost of these surprise bills can be considerable. A report from the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE) found that the average cost of surprise bills for those who visited the emergency room, had an elective surgery, or gave birth in a hospital ranged from $750 to $2,600 per episode.

So, surprise bills happen much more often than they should, but NSA adds extra protections to prevent surprise bills and give more power to healthcare payers regarding a fair price.

The Necessity of the No Surprises Act

Prior to the NSA, those who had health insurance but received care from an out-of-network provider or facility, even without knowing, may not have had their entire OON cost covered by their health plan. These individuals were then left with higher costs than if they had visited an in-network provider or facility.

On top of these out-of-network costs that were owed, balance billing could also occur, which is when the OON provider or facility bills the payer for the difference between the billed charge and the amount paid by the health plan. Unexpected balance bills from out-of-network providers are also called surprise medical bills, and it is instances such as this which the NSA protects against.

These surprise bills mean that individuals have to pay an additional amount out of pocket, even if they have reached their out-of-pocket limit.

Surprise medical bills are a common concern for the insured, with the KFF poll finding that 35% of insured adults feel “very worried” about their ability to afford unexpected medical bills, and 30% feel “somewhat worried”. The NSA’s actions and protections help ease these worries and reduce fear of receiving care.

In fact, unexpected medical bills are the top concern for insured adults, proving just how influential this act will be for providing peace of mind and helping adults feel more confident in the cost of their care.

Key Actions for Healthcare Payers

While the NSA is an excellent groundwork for reducing unexpected medical bills, especially those from out-of-network facilities and providers, there are still some things that healthcare payers must keep in mind to ensure that they reap all the benefits of this act and further improve their knowledge of their healthcare costs prior to the procedure.

Payers should be aware of two significant areas where the NSA impacts them, OON claims processing/payment and transparency provisions.

For the former regard, the NSA states that providers are no longer allowed to balance-bill members for items and services received during:

  • an OON emergency
  • emergency services provided by an OON provider at in-network or OON facilities
  • emergency and non-emergency OON air ambulances
  • Non-emergency services from OON provider at in-network facility

With these new protections, those who are uninsured or decide not to use health insurance for a service can get a reasonable estimate for their care upfront, even before the visit. In addition, those who disagree with the bill may be able to dispute the charges.

As part of the NSA, all providers must give written notice, at least 72 hours before a procedure, listing if the facility is in-network and a good-faith estimate of the cost of the services.

While a provider cannot balance bill a patient for more than what they would pay an in-network provider, a provider may raise their prices to account for this loss in revenue. As a payer, it is your job to show defensible, market-based pricing to discern if you are being overcharged. Being well-prepared results in payers that have better negotiations under the NSA, so preparation and research are essential.

In addition, if the cost of your care exceeds the good faith estimate by more that $400, you are eligible to dispute these charges.

Exceptions to the No Surprises Act

It’s important to note the exceptions to the above rules to ensure that you do not fall under these jurisdictions.

Individuals who knowingly and willingly consent to use an out-of-network provider for non-emergency services cannot apply NSA. However, the provider must give written notice at least 72 hours in advance and obtain the patient’s written consent and acknowledgment that the provider does not participate in-network, and they must also provide a good-faith estimate of out-of-network charges. As previously discussed, if these charges are $400 or more than the amount billed, the individual can fight the charges.

These regulations mean that patients will know ahead of time if the provider functions in-network, and a good faith estimate of the cost to the patient will be. These stipulations allow the patient to make more informed decisions about which doctor they see and helps to reduce unexpected bills.

Final Remarks

The No Surprises Act is a monumental step in limiting the number of surprise medical bills and preventing astronomical medical bills that you are unprepared for and blindsided by. However, to receive the most benefit from this law, it is vital to be aware of what it is, what it means for you, and how to get the most out of it.

Following the steps listed above will help ensure that you receive a fair estimate and that you know what rights you have in regards when advocating for the price of your healthcare. Healthcare shouldn’t have surprises, and with the CMS No Surprises Act, you can ensure that you are always prepared for the cost of your healthcare services.

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