No Surprise Billing Act: What You Need To Know

The No Surprise Billing Act may be the most poorly written, difficult to understand set of regulations I have encountered in my legal career.  Stark is much, much easier to understand.  Much of the guidance out there is misleading, if not entirely wrong.  Here is a short explanation of what you need to know.

Does the No Surprises Act Apply to Clinics?

Yes, parts of it do.  This is one of the more complex areas and many sources mistakenly state the rules do not apply to clinics.  First, it is helpful to think of the Act as having three prongs.  One prong deals with emergency services, one deals with patients who are getting care at a hospital or ASC (it also applies to freestanding EDs or air ambulances), and the final prong deals with estimates for patients who are not using insurance to pay for their care, either because they are uninsured or choosing not to use their insurance.

That third prong applies to clinics.  Clinics will have to give estimates to patients who are not using insurance to pay for their care.  The first two prongs will apply in clinics to the extent that clinic physicians are providing services to clinic patients in either a hospital or an ASC.  For the most part, the other two prongs do not apply in the clinic, but, if you send patients to a hospital or ASC, you will need to post a one-page notice somewhere in your clinic and provide a copy of that notice to the patients being sent to the hospital or ASC.

Does the No Surprises Act Apply to ASCs?

Yes!  The obligations on ASCs are exactly the same as they are for hospitals.  The only good news is that if the physicians at the ASC all participate in the same insurance plans that the ASC participates in, the impact is much smaller.  Then the Good Faith Estimate requirements discussed below will be the primary impact, though patients will still need to get the Disclosure Notice discussed below.

What Disclosure Notice Are You Talking About?

There are several different documents that must be used, and unfortunately, CMS has named them poorly, using the same form number 10780, for different forms.  (Helpful, eh?)  The "disclosure" is a one-page document that gives patients an explanation of their rights under the No Surprises Act.  CMS has a draft form you may use, but you don't have to use that exact form.  The form must be posted and made available in-person, electronically, or via mail as the patient chooses.  The good news is that, at this moment in time, there is no penalty for failure to do this, though civil monetary penalties will almost certainly be issued later this year.

What is the Good Faith Estimate?

This is the prong of the rule that applies to all physicians.  As of January 1, 2022, if a patient is not using insurance to pay for their care, they are entitled to get a Good Faith Estimate (GFE) of their care for any service scheduled three or more business days in advance.  There is a long list of things that the GFE must include; simply telling them the cost is insufficient.  For reasons I can't fathom, the GFE must include details like the diagnosis and procedure codes, and even your NPI.

Note that this applies to every scheduled service, including office visits, if it is scheduled three or more days out.  When the event is scheduled between three and nine days out, you must provide the estimate within one business day after the scheduling takes place.  If the event is scheduled ten or more days out, you get three business days to provide the estimate.

What Happens if We Don't Give the Estimate?

At this time, there are no direct penalties for failing to give the estimate, but the patient can challenge your bill.  In the absence of an estimate, or if the estimate understates the actual charge by $400 or more, the patient can file for a dispute resolution procedure.  In addition, when the civil monetary penalties are issued in the future, it is quite possible that there will be fines for failure to issue the GFE.

What Are Notice and Consent that I Hear About?

When a patient goes to an in-network facility but receives care from physicians who are out of network, there are limits on the ability of the out-of-network physician to balance bill the patient.  First, some professionals, including anesthetists, radiologists, and hospitalists, are always prohibited from balance billing.  There are also limits on balance billing for certain services, like assistants at surgery and laboratory and imaging.  But for surgeons, it is possible to balance bill if 1) the services are not emergency services (with "emergency" having the same definition as under EMTALA) and 2) the patient consents using the government-drafted notice and consent.  Note that, unlike the disclosure form, you must use the government's form for this consent.

Note that for emergency services, balance billing is prohibited.  The law basically deems emergency services to be "in-network" and requires the insurer to pay them as if they were in-network, and physicians and facilities to accept payment as if it is in-network.

This is Really Confusing; What Other Resources are There?

A colleague and I conducted a free webinar to explain the requirements.  You may watch it here:

In addition, our firm has written a memo explaining the rules that we are providing at a flat rate of $2,000 to hospitals and $1,000 for clinics.

There are a variety of other resources, but be careful.  Even information from some well-known trade groups is inaccurate.  I am sympathetic to this because the rules are so poorly written.  One small example: the rules use the same word, "facility," to describe different types of organizations for purposes of the GFE and the Notice and Consent.  With drafting this careless, confusion is a natural result.

The good news is that, until the government issues rules about Civil Monetary Penalties, the consequences for violating the regulations are limited to the ability of patients who are not using insurance to pay for their claim to challenge their bill if you fail to meet the GFE requirements.  It is wise, however, to use this time to develop processes so that you are prepared if civil monetary penalties are established, as the government has promised.

David Glaser helps clinics, hospitals, and other healthcare entities negotiate the maze of healthcare regulations, providing advice about strategy, reimbursement, and compliance.

David is a shareholder in Fredrikson & Byron's Health Law Group and co-founded its Health Care Fraud & Compliance Group. He has considerable experience in healthcare regulation and litigation, including voluntary disclosures, criminal and civil fraud investigations, overpayments, and reimbursement disputes.

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