The Surprise Act: Surprise Changes to Out of Network Medical Billing

On December 27, 2020, Congress enacted, and the President signed, H.R. 3630, the Surprise Act (“Act”), which will take effect on January 1, 2022. This Act expands restrictions on charging health care plan holders out-of-network rates for certain services and applies to nearly all private health care providers. First, the Act requires insurers offering plans that cover emergency services to bill plan holders no more than the median in-network rate for a particular emergency service, even if the service provider is out of network. It further prohibits insurers from billing plan holders more than the median in-network rate for nonemergency services provided by out-of-network providers at in-network facilities.

The Act specifies that out-of-network providers may not bill plan holders for the difference between the in-network and out-of-network rates for emergency services. It further prohibits out-of-network providers from billing plan holders for the difference in rates for nonemergency services provided at an in-network facility unless the provider complies with specified notice and consent requirements. Even when complying with these requirements, an out-of-network provider may not charge plan holders for the difference in rates for such nonemergency services if the provider is based at the in-network facility and is the only provider available to deliver the particular treatment or service at the facility.

Fortunately for providers, the Act establishes a process for resolving payment disputes through an independent dispute resolution (“IDR”), which is similar to New Jersey’s recently enacted out-of-network law. Providers and Healthcare plans are required to negotiate payment amount for at least (30) days prior to the provider seeking resolution through IDR. The process is commonly referred to as baseball style arbitration where the provider and plan submit final offers for payment and within thirty (30) days the arbitrator will render their decision.  These decisions are binding, and the losing party is responsible for any arbitration related fees.

States will be primarily responsible for enforcement of the Surprise Act with the federal government maintaining oversight as a fallback enforcer. Several states have already enacted surprise bills laws for healthcare plans. However, by July 1, 2021 the Secretary of Health and Human Services is required to establish a complaint process for violations of surprise billing protections by health care providers and facilities for consumers.  Violations of this act by providers could result in fines as high as $10,000.00. 

As these new policies are implemented, compliance related issues will likely create new costs for providers and healthcare plans.  Providers will need to implement new procedures and systems to track payment negotiations/efforts in order to preserve arbitration rights.  The establishment of a reliable compliance program is essential to receiving fair payment for services rendered and not leaving money on the table.

How Frier Levitt Can Help

Contact Frier Levitt today to discuss how this new law may impact your practice and how we can help implement a compliance program in anticipation of the effective date of this law.