What is Surprise Billing?

One of the most pernicious issues affecting patients within the healthcare financing system is surprise billing. Surprise billing refers to any bill that is unexpected and not previously explained or outlined to patients before receiving treatment or services. Surprise billing usually occurs when patients receive care or treatment from a health system that is “out-of-network” form their insurer.

However, not all patients are aware of the extent or limitations of their insurer’s networks, especially during emergencies. Many patients may not know that the health system they are seeking care from is out-of-network from their insurer. In these instances, the health system will send out a balance bill that seeks the difference between the cost of treatment and the coverage of the insurance.

Surprise billing can be exorbitantly expensive, reports from the US Department of Health and Human Services have shown that surprise medical bills can be as much as $1,200 for anesthesiologists, $2,600 for surgical assistants, and $750 for childbirth-related care. Surprise billing is also toxic for patient-provider relationships. Patients who experience surprise billing are much less likely to return to their provider and will hold declining levels of trust of their provider and the healthcare system generally.

How the No Surprises Act Will Protect Patients

On January 1st, 2022, the No Surprises Act (NSA) took effect, granting sweeping protections for patients against surprise billing as well as providing new guidance for physicians when caring for patients in specific situations.

The NSA will require private health plans to cover out-of-network claims as well as apply in-network cost sharing. This will apply to both job-based and non-group plans, as well as grandfathered plans. The NSA will also prohibit doctors, hospitals, and covered providers from billing patients more than the in-network cost amount for surprise medical bills.

The NSA was crafted to protect patients from harmful financial practices and has been hailed as a impressive step for consumer healthcare protections. As Health and Human Services Secretary Xavier Becerra said, “No one should have to worry about going bankrupt after falling ill or seeking critical care”.

How Healthcare Providers Will Need to Adapt in 2022

For some healthcare providers and health systems, the NSA will require significant changes to their current financing models. The NSA will be enforceable with a penalty of up to $10,000 for each applicable violation. In addition to financial penalties, healthcare systems that refuse to abide by the new statutes of the NSA will experience patient attrition as frustrated patients flee for NSA compliant healthcare systems.

Quite simply, it’s critical that healthcare providers understand the gravity of the NSA and strive to make every aspect of their financing compliant with the new NSA in 2022.

The following are several areas in which healthcare providers should take the initiative to stay abreast of new financial regulations.

• Disclosure of Balance Billing Protections

Under the NSA, healthcare providers will be required to make public information on patient’s rights such as requirements under federal and state law, as well as contact information for state and federal governmental agencies that patients can contact to report violations. <

• Provide Notice and Consent for Balance Billing by Out-Of-Network Providers

With the NSA, healthcare providers must provide written notice of medical costs within 72 hours of the item or service being delivered and must obtain consent from the patient to receive services. The notice must convey that the provider is out-of-network as well as provide a good faith estimate of the charges incurred for treatment. The statement of consent must also state that consent is optional and that the patient can choose an in-network provider instead if they wish.

• End Balance Billing for Air Ambulance Services

Air ambulance services will not be able to balance bill patients for services. All patients will only be required to pay the in-network cost-sharing amount that would normally apply.

• Develop New Payer Relationships

Starting in January 2022, healthcare providers will need to create relationships with a much wider array of payer organizations and health plan providers. Because each health plan has its own traits and features, healthcare providers will need to invest resources into quickly building new payer relationships.

• Establish New Rates for Services and Procedures

Because providers may no longer balance bill for out-of-network services, they will need to develop new rates to ensure that working with new payers does not exhaust their financial resources. Proactively developing new rates for services and procedures will help providers avoid future payment disputes or NSA non-compliance.

Developing a New Model for Healthcare Finance

As healthcare providers chart their future finances, it will be imperative that they keep the new requirements of the No Surprises Act in mind. Properly preparing for the NSA’s new guidance and requirements will not only prevent financial penalties that can come with non-compliance, it will also allow healthcare providers to better cultivate a relationship of trust with their patients. With the right preparation and attitude, the No Surprises Act can be a benefit to both patients and healthcare providers.

How AccessOne Can Help

As a patient financing partner, AccessOne is focused on expanding access and availability to affordable medical financing for all Americans. Our model allows us to provide low- and zero-interest loans to all patients, and often with generous and flexible term limits. We treat each patient as an individual, and work with them to ensure that both their financial health and payment obligations are met.

We’ve found that our patients are not only more likely to successfully pay their financial obligations in full, but that they’re more likely to continue forward with necessary treatments and procedures, and to experience positive health outcomes and experiences with their health system and providers. We invite you to learn more about how AccessOne can help your organization adapt and respond to the No Surprises Act in 2022.