QUESTION: We’ve heard that the surprise medical billing requirements will impact how our company’s group health plan covers emergency services. But do the surprise medical billing requirements apply to any non-emergency services?
ANSWER: A number of new patient protection mandates and disclosure requirements were included in legislation passed in December 2020, including surprise medical billing requirements for out-of-network emergency and non-emergency services. The sweeping protections apply broadly to group health plans (including grandfathered plans) and are applicable for plan years beginning on or after January 1, 2022. The mandates provide rules for how plans cover emergency service, as discussed in our previous Checkpoint Question of the Week, but they also create rules for coverage of certain non-emergency services.
Under these new patient protections, if your plan provides coverage for items or services (other than emergency services) furnished by a nonparticipating provider (i.e., an out-of-network provider or other provider that does not have a contractual relationship with the plan) at an in-network facility, the plan generally must comply with the following requirements:
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Cost-Sharing. The cost-sharing requirement may not be greater than the cost-sharing requirement that would apply if the items or services had been furnished by a participating provider. And cost-sharing must be calculated as if the total amount charged for such items and services is equal to the “recognized amount,” which generally means the median in-network rate recognized by the plan for such items and services, unless applicable state law requires otherwise. The plan must count any cost-sharing payments toward any in-network deductible and out-of-pocket maximums under the plan (and only in-network deductible and out-of-pocket maximums can be applied).
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Payments to Providers. Not later than 30 calendar days after the bill for such items or services is transmitted by the provider, the plan must send the provider an initial payment or notice of denial of payment. The plan must pay a total payment directly to the provider that is, together with any initial plan payment, equal to the amount by which the “out-of-network rate” for the items and services exceeds the cost-sharing amount. The out-of-network rate generally means the amount agreed upon by the plan and the provider or—if the parties cannot reach an agreement—established through an independent dispute resolution process that takes into account specified factors affecting medical costs, unless applicable state law specifies an amount for the service.
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Balance Billing. Nonparticipating providers and facilities generally are limited to collecting cost-sharing amounts from patients and are prohibited from balance billing. However, subject to certain exceptions, a nonparticipating provider may be permitted to balance bill so long as the provider furnishes advance notification of nonparticipating status (and other disclosures) and obtains a patient’s written consent for treatment. If a nonparticipating provider satisfies the requirements to balance bill, the cost-sharing limitations described above do not apply to the plan’s payments for that provider’s services.
The surprise medical billing legislation also added rules for surprise air ambulance bills and a number of transparency requirements. For more information, see EBIA’s Group Health Plan Mandates manual at Section XIII.B (“Patient Protections”) and EBIA’s Health Care Reform manual at Section XII.B.4 (“Expanded Patient Protections: Surprise Medical Billing (Emergency and Non-Emergency Services)”). See also EBIA’s Self-Insured Health Plans manual at Section XIII.C (“Federally Mandated Benefits”).
Contributing Editors: EBIA Staff.
