Recently, the U.S. Dept. of Health and Human Services (“HHS”), Dept. of Labor, Dept. of Treasury, and the Office of Personal Management jointly issued an interim final rule regarding surprise medical billing. The interim final rule, entitled “Requirements Related to Surprise Billing: Part 1” (the “Rule”) may be accessed here, and will go into effect on September 13, 2021.
Amongst other things, the Rule is meant to restrict excessive out of pocket costs to patients from surprise billing and balance billing. The Rule refers to a “surprise medical bill” as an unexpected bill from a provider or facility that typically occurs when a covered person receives medical services from a provider/facility that, usually unknown to the beneficiary, is a nonparticipating provider/facility with respect to the beneficiary’s coverage. A covered person can receive a surprise medical bill in either an emergency or non-emergency care setting. In either circumstance, the covered person may not be able to choose the provider or be able to ensure the provider is a participating provider. This can result in a person receiving a higher cost-sharing bill due to the services being provided by an out-of-network provider.
In addition to surprise billing, a covered person could receive a balance bill from the nonparticipating provider or facility. The Rule refers to a balance bill as a bill when a provider charges a patient the remainder of a medical bill that their insurance did not cover. The Rule states that there is evidence to suggest that balance billing is used as leverage by some providers to obtain greater in-network payments, which results in higher premiums and cost sharing for individuals, and an increase in health care expenditure overall. By way of example, the Rule refers to a six-year study of a large commercial issuer found over 39% of emergency department visits to in-network hospitals resulted in an out-of-network bill, and that such incidence is on the rise. This resulted in a 42% increase in surprise bill amounts from 2010 to 2016.
Note that balance billing is currently prohibited under both Medicare and Medicaid. While this would protect beneficiaries under a federal healthcare program, it would not protect individuals covered by a commercial plan. While a number of states have enacted laws to reduce or eliminate balance billing (including Michigan), the Rule suggests such laws may be too narrow to be effective. This is generally due to ERISA, which preempts state laws that regulate self-insured group health plans sponsored by private employers. Further, state laws are generally limited in their ability to address surprise bills from out-of-state providers. One key purpose of the Rule is to extend protection against surprise medical billing and balance billing to patients not only insured through a federal healthcare program (e.g., Medicare or Medicaid) but those insured through employer-sponsored and commercial health plans.
Key provisions of the Rule include the following:
- A ban on surprise billing for emergency services (e., they must be treated on an in-network basis without requirements for prior authorization);
- A ban on high out-of-network cost-sharing for emergency and non-emergency services (e., patient cost-sharing cannot be higher than if the services were provided by an in-network provider, and coinsurance/deductibles must be based on in-network rates);
- A ban on out-of-network charges for ancillary care (g., anesthesiologist or assistant surgeon) at an in-network facility under any circumstance; and
- A ban on other out-of-network charges without advance notice.
Once the Rule takes effect, health care providers and facilities will be required to provide patients with a plain-language notice and obtain patient consent before the patient receives out-of-network care. This notice and consent requirement is meant to provide patients with a financial peace of mind that they will be safeguarded from unknowingly receiving out-of-network care and subsequently incurring any exorbitant expenses for such services.
Please note that the Interim Final Rule includes a Request for Comment (“RFC”), meaning stakeholders are encouraged to submit their comments regarding the Interim Final Rule. The deadline for submitting a comment is September 7, 2021. Comments may be submitted electronically here.
For more information on the issues relating to this article, please contact the Health Law Partners at (248) 996-8510 or (212) 734-0128 or by email at firstname.lastname@example.org.