On July 1, 2021, the US administration released a rule that restricts excessive out of pocket costs to patients from surprise billing. Surprise medical bills result when a patient unexpectedly receives care from a physician who is not in their health plan’s network. The No Surprises Act that takes effect in January 2022 aims to protect patients against surprise billing. The new law applies to payers, physicians and other clinicians, facilities, and air ambulances, and as such, will also impact medical billing companies.
What are Surprise Medical Bills?
The term “surprise medical bill” describes charges that arise when an insured person inadvertently receives care from an out-of-network provider. Though the patient goes to a hospital that accepts their insurance, they may end up being treated by out-of-network providers like emergency physicians or anesthesiologists. When patients get care from a provider outside of their insurer’s network, the physician or hospital subsequently bills them for the amount not covered by their insurance. This bill amount can be hefty. It generally has two components:
- The high amount the patient owes their plan, which is the difference in cost-sharing levels of the in-network and out-of-network service. For e.g., a plan may have a 20% coinsurance for an in-network provider but a 50% coinsurance for an out-of-network provider.
- Balance billing, which is billing a patient for the difference between the full amount providers charge the patient and the amount that the patient’s insurance pays. For e.g., if the provider’s charge is $100 and the allowed amount is $80, the provider may bill the patient for the remaining $20.
According to a 2020 JAMA infographic based on data from the Kaiser Family Foundation (KFF), 1 in 5 insured adults had an unexpected medical bill from an out-of-network provider in the previous two years. The prevalence of surprise bills varies widely between states. KFF found that 70% of individuals with bills they couldn’t afford didn’t know the provider was out-of-network when they received care.
The No Surprises Act will protect patients from surprise medical bills and has important implications for patients, physician practices, and health plans.
Provisions of the No Surprises Act
The new rule restricts out-of-network providers in the ability to balance bill patients. Patients will enjoy protections against surprise billing and also new price transparency tools. The rule bans
- Surprise billing for emergency services
- Balance billing – providers cannot bill a patient for the remainder of a surprise bill after the patient’s health plan pays the in-network rate.
- High out-of-network cost-sharing for emergency and non-emergency services
- Out-of-network charges for ancillary care
- Other out-of-network charges without advance notice
In their press release, the HSS noted: “These provisions will provide patients with financial peace of mind while seeking emergency care as well as safeguard them from unknowingly accepting out-of-network care and subsequently incurring surprise billing expenses”.
Role of Medical Billing Companies
With the challenges involved in coding and claims submission, most medical facilities outsource revenue cycle management. Outsourced medical billing services create claims for practices by registering patients, verifying their benefits, coding and billing services, and auditing claims before submission to payers. Insurance verification services provided by a medical billing company play an important role in helping patients learn about the costs of care.
Healthcare providers and insurance companies and need to keep patients informed about the costs for potential services. This involves calculating the total costs of their treatment and the portion that the insurance will cover. Patients should have clear information about whether providers they receive care from are in or out of their network and what costs they may face.
Patient eligibility verification services involve checking the extent of a patient’s network coverage before their next medical appointment. This is an important step in informing patients about how their insurance works, their benefits, and what costs they may face. Among other things, benefits verification includes:
- Checking ahead of time to see if the facility accepts the patient’s insurance plan. An insurance verification specialist will call the insurance company to verify plan information as data available online may be outdated.
- Before any care is provided, they will check if the provider is part of the patient’s “insurance plan’s provider network”.
- Verifying the patient’s benefits and getting preauthorization from the insurance company to cover a specific service before the service is provided.
The cost of treatments are determined by their billing codes. A medical billing company can help providers submit an estimated amount of billing and service codes for all expected services prior to the provision of treatment. This is a requirement for greater health care cost transparency under the No Surprises Act.
Health plans must provide enrollees with an Advanced Explanation of Benefits (EOB) prior to scheduled care or upon request so that enrolees will be informed about not only the total cost of the out-of-network care, but their likely out-of-pocket expenses. The No Surprises Act also requires providers to submit regular updates to health plans to help insurers maintain up-to-date, accurate directories of their in-network physicians. This will allow beneficiaries to choose healthcare services covered by their insurance plan.
By ensuring comprehensive insurance verification and accurate coding to support the physician’s documentation, reliable medical billing and coding companies help providers maintain price transparency. Reduce patient confusion about out-of-pocket expenses and medical billing helps them make informed decisions about their healthcare and ensure that fewer claims go unpaid.