The Centers for Medicare and Medicaid Service just released a series of new regulations targeted at banning surprise billing in most instances, taking aim at a scourge that ends up costing many covered individuals thousands of dollars even when they are treated in-network.
The goal of the rule, slated to take effect Jan. 1, 2022, is to ensure that health plan enrollees are not gouged for out-of-network billing and balance billing for most services unless divulged to the beneficiary and approved by them in advance.
Balance billing ― when a medical provider bills a covered individual for the difference between the charge and the amount the insurer will pay ― is already prohibited by Medicare and Medicaid.
The interim rule will cover people who are insured by employer-sponsored health plans and plans purchased through publicly operated marketplaces. The new regulations are being implemented as required by the No Surprises Act of 2021, which passed through Congress with bipartisan support.
The effects of surprise billing
Surprise billing happens when people unknowingly get care from providers that are outside of their health plan’s network, which can happen for both emergency and non-emergency care. Examples of surprise billing include:
- Someone breaks their leg in a fall and has to go to the nearest emergency room, which is not part of their insurer’s network. They are billed at market rates as their insurer doesn’t cover the service.
- Someone has an operation in a network hospital but one of the providers treating them (an anesthesiologist or radiologist, for example) is not in the network, so the covered individual is billed at market rates.
Two-thirds of bankruptcies are caused by outstanding medical debt, and out-of-network billing is partly to blame for that.
Studies have shown that more than 39% of emergency department visits to in-network hospitals resulted in an out-of-network bill in 2010, increasing to 42.8% in 2016. During the same period, the average amount of a surprise medical bill also increased, from $220 to $628.
What the regulations do
The new regulations:
- Ban surprise billing for emergency services, regardless of where they are provided. That means if a person has no choice but to go to an emergency room that is out of network, they can only be billed at the same rate they would be charged for services at an in-network hospital.
- Bar health insurers from requiring prior authorization for emergency services, and they can’t charge their higher out-of-pocket costs for emergency services delivered by an out-of-network provider. They would also be required to count enrollees’ cost-sharing for those emergency services toward their deductible and out-of-pocket maximums.
- Ban out-of-network charges for ancillary care at an in-network facility in all circumstances. This happens when there is an out-of-network provider working at an in-network hospital.
- Ban other out-of-network charges without advance notice.
- Require providers and hospitals to give patients a plain-language consumer notice explaining that patient consent is required to receive care on an out-of-network basis before that provider can bill at the higher out-of-network rate.
This is an interim final rule that is still out for public comment. It may be changed after the CMS receives comments.
More than likely it will take effect at the start of 2022, mostly intact.