Compliance Operations Overview: What is the No Surprises Act?

Compliance Operations Overview: What is the No Surprises Act?
The No Surprises Act is a federal law enacted in 2020. The law has two main purposes.

First, it prohibits surprise billing for patients with health insurance. Surprise billing occurs when a patient receives an unexpected balance bill for out-of-network services. This happens when patients are unknowingly treated by an out-of-network provider or facility. It also happens in emergency situations where patients cannot avoid out-of-network care.

Second, the law protects uninsured patients and self-pay patients who pay cash for their care. Healthcare providers and facilities must give these patients a good-faith estimate. This document outlines the expected charges for healthcare items or services.

What is Balance Billing?
Balance billing happens when a provider bills a patient for the difference between the provider's charge and the amount the patient's insurance allows.

Here's an example: A provider charges $100 for a service. The insurance company says the allowed amount is $70. The provider sends the patient a bill for the remaining $30. That $30 is the "balance bill."

Who is Protected by the No Surprises Act?
The Act protects people covered under:

• Group health plans
• Group and individual health insurance
• Federal Employees Health Benefits plans

The Act also protects uninsured and self-pay patients through the good-faith estimate requirements.

When Does the No Surprises Act Not Apply?
Surprise billing protections generally do not apply in these situations:

1. A provider or facility gives proper notice to a patient and gets their consent to waive protections (this is permitted with respect to certain post-stabilization services and non-emergency services)
2. The items or services are not covered by the person's health plan.
3. Ground ambulance services.

The Act also does not apply to patients covered by these government programs:

• Medicare and Medicare Advantage
• Medicaid and Medicaid managed care plans
• Indian Health Service
• Veterans Affairs Health Care
• TRICARE programs

These programs have their own balance billing protections.

What Does the No Surprises Act Require?
The No Surprises Act creates two main sets of requirements.

Balance Billing Prohibitions: The Act prohibits providers and facilities from balance billing patients with insurance in certain situations. These situations include emergency services, post-stabilization services, and certain non-emergency services at in-network facilities. The No Surprises Act also sets rules for when providers are allowed to ask patients to waive these protections.

Good-Faith Estimate Requirements: The Act requires providers and facilities to give uninsured and self-pay patients a good-faith estimate of charges before providing care. This helps patients know what to expect to pay.

The sections below explain these requirements in detail.

Balance Billing Protections:

Emergency Services
Out-of-network providers and emergency facilities cannot balance bill patients who receive emergency services. This applies to services at hospitals and independent freestanding emergency departments.

Patients can only be billed for their in-network cost sharing amounts. These include deductibles and co-pays.

Emergency services include:

1. Medical screening exams to evaluate whether an emergency medical condition exists. This includes ancillary services.
2. Examination and treatment needed to stabilize a patient.

Post-Stabilization Services
Post-stabilization services are covered services provided after a patient is stabilized. They may be part of outpatient observation. They may also be part of an inpatient or outpatient stay related to the emergency visit.

Some post-stabilization services are also considered emergency services. Balance billing prohibitions generally apply to these services.

An out-of-network provider or emergency facility can ask a patient to waive these protections in limited circumstances.  To ask for a waiver, all of these conditions must be met:

1. The patient is stable enough to travel to an in-network provider or facility, and that provider or facility is within a reasonable travel distance.
2. The patient or their authorized representative can receive information and give informed consent.
3. The out-of-network provider or facility gives written notice and gets written consent. The notice and consent must include required content. They must be provided in the required timeframe and format.
4. The provider or facility complies with any additional state law requirements.

Example:
A patient has a serious car accident and is brought by ambulance to the nearest emergency department. That hospital is out-of-network for the patient's insurance plan. The patient is given emergency treatment and then stabilized. 

Now, the patient needs continued inpatient care, including additional monitoring, wound management, physical therapy consultations, and further treatment that flows directly from the emergency. These services are post-stabilization services.

The patient's in-network hospital is 15 miles away and the patient is stable enough to be safely transferred there by medical transport. The out-of-network hospital, however, would prefer to keep the patient and continue providing that ongoing care — at out-of-network rates, which would expose the patient to balance billing.

What the No Surprises Act Does
At this moment, the No Surprises Act’s waiver rules kick in. The out-of-network hospital cannot simply continue treating the patient and bill them at out-of-network rates without the patient's informed, written consent. Balance billing protections continue into the post-stabilization period. Therefore, if the hospital wants to bill out-of-network for further care, it  needs the patient to affirmatively agree to waive the balance billing protections.

The No Surprises Act requires that in order to be in a position to agree to waive them, the patient must be stable, coherent, informed in writing of what they're agreeing to, and a viable in-network alternative must actually exist within reasonable travel distance.

Non-Emergency Services
Balance billing protections also apply to certain non-emergency services. These are services provided by an out-of-network provider at an in-network facility.

Ancillary Services: Providers may NOT ask patients to waive balance billing protections for ancillary services.

Ancillary services include:

1. Items and services related to emergency medicine, anesthesiology, pathology, radiology, and neonatology
2. Items and services provided by assistant surgeons, hospitalists, and intensivists
3. Diagnostic services like radiology and laboratory services
4. Items and services provided by an out-of-network provider when no in-network provider can provide them at the in-network facility

Non-Ancillary Services: Providers CAN ask patients to waive protections for non-ancillary services. But they must meet all these requirements:

1. The items or services do not meet the definition of ancillary services.
2. The items or services are not furnished because of unforeseen, urgent medical needs.
3. Another in-network provider can deliver the items or services at the in-network facility.
4. The provider gives written notice and gets written consent. The notice and consent must comply with all statutory and regulatory requirements.

Other Balance Billing Prohibitions
Providers and facilities cannot balance bill for items or services furnished because of unforeseen, urgent medical needs. This applies even if the provider previously gave notice and got consent.

This rule applies to both emergency and non-emergency services.

Notice and Consent Requirements
When a provider or facility wants to waive balance billing protections, timing matters.

For appointments scheduled more than 72 hours in advance: Notice must be given at least 72 hours before the appointment.

For appointments scheduled within 72 hours: Notice must be given on the date the appointment is made.

For same-day appointments: Notice must be given 3 hours before providing services.

If these timing requirements are not met, a waiver is invalid, and the balance billing protections remain fully in place.

Consent documents must be signed. Electronic signatures are acceptable. The documents must include the time and date when the patient received notice. They must also include the time and date when the patient signed consent.

Patients must get a copy of the signed notice and consent documents. They can choose how to receive the copy: in person, by mail, or by email.

Patient Information Requirements
Providers and facilities must give patients information about balance billing protections. This includes information about federal and state protections. It also includes how to report violations.

This information must be:

• Posted prominently at the facility
• Posted on a public website if the facility has one
• Provided directly to participants, beneficiaries, and enrollees

Good-Faith Estimate Requirements

Who Must Provide Good-Faith Estimates?
Healthcare providers and facilities must provide good-faith estimates to uninsured patients and self-pay patients.

First, providers and facilities must ask whether a patient scheduling services has insurance. They must ask about:

• Group health plans
• Individual health insurance coverage
• Federal healthcare programs like Medicare or Medicaid
• Federal Employees Health Benefit plans

If the patient does not have any of these, the provider or facility must provide a good-faith estimate.

When Must Good-Faith Estimates Be Provided?
Providers and facilities must provide a good-faith estimate in two situations:

1. When an uninsured or self-pay patient schedules an appointment
2. When an uninsured or self-pay patient requests an estimate

What is a Good-Faith Estimate?
A good-faith estimate is not a bill. It is a document that outlines expected charges for healthcare items or services.

The estimate must be based on information the provider or facility knows at the time. The estimate must include expected charges for:

1. The primary item or service
2. Any other items or services reasonably expected as part of the primary item or service for that period of care

For example, if a patient schedules surgery, the estimate should include charges for the surgery itself. It should also include charges for anesthesia, lab work, and other services typically needed as part of that surgery.

Why Good-Faith Estimates Matter
Good-faith estimates give uninsured and self-pay patients transparency about costs before they receive care. Without insurance to negotiate rates, these patients often face the highest charges. The estimate helps them understand what they will need to pay. It helps them plan financially. It also helps them compare costs between different providers.

Conclusion
The No Surprises Act protects patients from unexpected medical bills in two important ways.

For insured patients, it prohibits surprise balance billing in emergency situations and certain non-emergency situations. Patients can only be charged their in-network cost sharing amounts even when treated by out-of-network providers in these circumstances.

For uninsured and self-pay patients, it requires transparency through good-faith estimates. These patients get to see expected costs upfront so they can make informed decisions about their care.