Last year, the U.S. government announced an interim final rule (IFC) related to the Surprise Billing Act. The rule defines the No Surprises Act's requirements for group health plans, carriers and payers, medical service providers, and other ancillary services. The regulations will come into effect for providers from January 1, 2022, and for others from or after January 1, 2022, based on the contract date.

The Surprise Billing Act is an act introduced to check the practice of surprise billing. A surprise medical bill, also known as out-of-network billing, kicks in when a patient is provided a bill in excess, to account for variance in the out-of-network provider's fee and the insurance amount—after deductibles and co-pays. Such billings happen because the provider and the insurer do not have a contractual agreement. Therefore, the provider bills the patient for the amount not provided by the insurance plan.

Essentially, the Surprise Billing Act disallows out-of-network providers from billing patients more than a stipulated amount. Any violation can lead up to a penalty of $10,000 per case. The act, however, provides exceptions to such protections. The exception comes into effect if a patient uses an out-of-network provider for nonemergency services in full knowledge of the consequence. Per the act, carriers need to make a first round of payments to the provider. In case of denials, it must be done within 30 days of bill submission.

You should review your revenue cycle management process to ensure there are no gaps in the process. Such gaps can crop up anytime and go unnoticed. You only get to know that there is an issue when your team struggles to create clean claims or struggles to keep denied claims under control or is unable to keep bad debt from growing.  

The review should happen across all stages of your revenue cycle process. However, the most important stage is the pre-service or eligibility verification stage. This is because, per stats, 40% of healthcare denials happen from mistakes made during the registration stage.

Much of the problems arising in this stage can be solved by adopting some best practices. Firstly, providers must review their information collection process. Automating the process can be the best approach. Another equally important requirement is training and educating front-end staff. Likewise, establishing a robust tech-driven process to identify insurance plan and verify eligibility are important. One more important consideration is to train staff to develop respectful patient interaction. It must be courteous, easy to understand, and clear from all ambiguities.  

The Surprise Billing Act lays great importance to EOBs. Therefore, to abide by this act, providers must furnish a crystal clear and on-time EOB notification to patients. Some of the salient points that need to be mentioned in the EOB include the participating status of the provider and the contracted rate. If the facility is out-of-network, the EOB must clearly state ways in which the patient can find information on participating physicians at the facility. 

Besides, EOBs must also focus on the good-faith estimate from the provider. The estimate must clearly state the amount that the plan is responsible for paying based on the estimate. The estimate must also clearly state the amount to be met by the patient toward out-of-pocket and deductible. Providers must also provide disclaimers, such as, "The coverage is subject to medical management requirements" and "The amount mentioned is only an estimate and may be subject to change." 

This is more of a payer task, yet providers have an important role in ensuring directories are up to date. Per the new law, by 2022, payers and providers must ensure timely provision of directory information to a plan. Providers who do not conform to network status must be removed from the directory. Provider directories having improper names will result in wrong estimates of in-network rates. In such cases, the plan will not be able to impose a cost-sharing amount, which is greater than in-network rates. A provider must therefore ensure their name features in the directory. In case it doesn't, they need to dial up the payer and get it corrected.  

One thing that the Surprise Billing Act is likely to trigger is arbitrations. This will lead to new administrative costs as providers will need to spend money to settle cases.  Besides financial costs, it will also cost them resources and time. As a result, providers will need to put up with lower reimbursements, thus impacting long-term sustainability. 

Therefore, to mitigate the impact, providers need to review both out-of-network and in-network contracts with payers. Providers must make all-out efforts to have in-network participation agreements with carriers. This will mitigate financial risks associated with arbitrations. Payers will stand to gain in terms of lower in-network rates.

Clear communication with patients and proper collaboration between payers and providers can go a long way in serving each other's interest. Awareness will make patients more than willing to pay for certain out-of-network services for more than the in-network cost-sharing. Likewise, price transparency will help providers tackle the challenges of the No Surprises Act more effectively in 2022. All stakeholders can leverage transparent pricing information to settle issues related to rates during the open negotiation period and final arbitration. 

In 2022, balance billing is all set to become a matter of past. Therefore, providers who were active in practicing balance billing must brace for a loss in cash.  To mitigate this loss, providers must look for cost savings by streamlining their operations. One good way is to carry out performance reviews using lean processes to get rid of issues like wasteful expenditures, improve throughput, and reduce total costs. 

This article is brought to you by MedBillingExperts, a specialized provider of revenue cycle management to healthcare providers in the U.S. We offer a comprehensive range of healthcare revenue management services. These include medical coding, medical billing, claims denial management, and payment posting. Our well-developed process is driven by professionals with vast exposure in revenue cycle management and advanced software systems. Over the years, we have partnered with several U.S.-based hospitals and clinics to make their revenue cycle process more effective. If you too are looking for the best medical revenue cycle management services, talk to us now.