By Jodi K. Miller, Esq. and Ryan J. Barry, Esq.
A woman injures her ankle while jogging and goes to the local emergency department for treatment. Despite her injury, she makes sure to go to a hospital in her health plan’s network. Some weeks later, she receives a significant — and unexpected — bill from an emergency department physician. While the hospital was in her health plan’s network, it turns out the treating physician was not. Her health plan paid a portion of the physician’s charges, but she is responsible for the remainder.
This type of ‘balance’ or ‘surprise’ bill has been an ongoing issue when patients receive care from out-of-network providers, some of whom then bill patients the difference between their charges and the health plan’s benefit payment for out-of-network services. These bills are often a surprise because the patient either was not able to choose an in-network provider or was unaware that the provider was out of network until after the services were rendered.
Recently enacted legislation at the federal level and in Massachusetts attempt to address this issue.
A new federal law, the No Surprises Act, went into effect on Jan. 1. The No Surprises Act imposes requirements on healthcare facilities and providers, as well as on health plans, in three key areas: emergency services, non-emergency services provided by out-of-network providers at in-network facilities, and air ambulance services. When those services are rendered, health plans must make a payment to the out-of-network providers, and patients are responsible only for the cost-sharing obligations they would have incurred had the care been provided in network (e.g., co-payments and deductibles).
If the provider does not accept the health plan’s payment, the plan and the provider must attempt to negotiate a reimbursement rate. If negotiations fail, the plan or the provider can initiate a dispute-resolution process to resolve the issue. In these cases, providers may not bill the patient more than the cost-sharing amount, and they are potentially subject to civil monetary penalties of up to $10,000 per violation if they do so.
The No Surprises Act also provides that out-of-network providers of certain scheduled services may not balance-bill patients unless the provider has given advance notice and obtained written consent from the patient. The act sets out specific requirements for the content of the notice, including a good-faith estimate of the costs incurred and a list of in-network options for the patient. This notice and consent process, however, is not available for out-of-network providers of emergency services and other ancillary services (such as anesthesiology, pathology, radiology, and other diagnostic services), or in circumstances where there no in-network provider is available.
Other provisions of the No Surprises Act, including disclosure requirements for both providers and health plans, also aim to increase transparency and consumer protections. Providers are required to publicly disclose and provide to patients a one-page notice about the balance-billing requirements and prohibitions of the No Surprises Act, as well as state law. As discussed below, Massachusetts, too, has recently imposed new disclosure requirements for providers.
Notably, the protections of the No Surprises Act do not apply to emergency services by ground ambulance providers. In those circumstances, out-of-network ground ambulance providers may still bill patients for significant balances, which are invariably a surprise to patients who had no ability to choose an in-plan ambulance provider in an emergency.
Regulations implementing the No Surprises Act have not been without controversy. Medical associations have criticized the regulations implementing the dispute-resolution process as unfairly favoring health plans. Health plans, on the other hand, have lauded the regulations, maintaining that the process will make healthcare more affordable and avoid unnecessary increases in health-insurance premiums.
On Jan. 1, 2021, Massachusetts passed its own law to address balance billing for non-emergency services. That law, which also took effect on Jan. 1, requires healthcare providers to disclose to patients certain information regarding their participation in patients’ insurance plans and patients’ financial obligations for scheduled procedures and services.
Generally, providers are required to tell patients whether they participate in the patient’s insurance plan. If the provider does not participate in the patient’s plan, the provider must disclose the charges and any facility fees for the procedure or service. The provider must also inform the patient they will be responsible for the charges and any facility fees not covered through the patient’s health plan and that they may be able to obtain the procedure or service at a lower cost from an in-network provider.
The law also imposes new requirements on in-network providers to disclose information to patients regarding charges for procedures or services. Providers must also inform patients if their participation in the patient’s health plan changes during a continued course of treatment and make various disclosures when referring a patient to another provider.
There are two consequences if a provider violates the Massachusetts law. First, if an out-of-network provider fails to provide the required notifications and information, the provider cannot bill the patient at all, except for any co-payment, co-insurance, or deductible that would be payable had the patient received the service from an in-network provider. Second, the commissioner of the Department of Public Health is authorized to fine non-compliant providers up to $2,500 per violation.
The recently enacted federal and state laws seek to provide protections to consumers to avoid inadvertent balance bills from out-of-network providers. As these laws go into effect at the start of the new year, providers and health plans should be ready to implement the requirements, and consumers should see fewer surprises in their mailboxes.
Jodi Miller and Ryan Barry are partners in Bulkley Richardson’s healthcare practice.