QUESTION: We have heard that legislation on surprise medical billing revised the patient protections that apply to our group health plan’s emergency services coverage. How have the rules changed, and when do they apply?
ANSWER: Coverage and disclosure requirements intended to protect consumers from surprise medical bills from nonparticipating providers and facilities were included in legislation passed in December 2020. Building on patient protections for emergency services originally included in the Affordable Care Act (ACA), the comprehensively revised and expanded requirements apply to emergency and certain non-emergency services for plan years beginning on or after January 1, 2022. Although the rules differ for emergency and non-emergency services, in each case, group health plans (including grandfathered plans) and insurers are limited in the patient cost-sharing they can impose, and providers and facilities are generally prohibited from balance billing (i.e., seeking to collect from the patient more than the applicable cost-sharing amount).
Some of the revised protections for emergency services will look familiar. For example, as with the ACA protections, emergency services must be covered without the need for prior authorization and without regard to whether the provider is a participating provider. If the services are provided by a nonparticipating provider or facility, the plan may not impose any limitation on coverage that is more restrictive than the requirements or limitations that apply to emergency services received from participating providers. And, as with the existing protections, cost-sharing for items and services provided by nonparticipating providers and facilities may not be greater than the cost-sharing that would apply if the items and services were provided by a participating provider.
Other protections expand the ACA provisions. For example, the revised protections apply to coverage of services both in an emergency department of a hospital (defined to include a hospital outpatient department that provides emergency services) and in an independent freestanding emergency department. Cost-sharing must be calculated as if the total amount charged for such services is equal to the “recognized amount,” which generally means the median in-network rate recognized by the plan for such services, unless applicable state law requires otherwise. The “recognized amount” supplants the ACA’s requirement for plans to base benefits on the greatest of three separate calculations.
Probably the most conspicuous changes involve the process for plan payments to nonparticipating providers—and the amount that must be paid. For instance, an initial payment or notice of denial must be sent within 30 days after the provider transmits a bill for services, and ultimately the plan must pay directly to the provider a total payment equal to the amount by which the “out-of-network rate” for such services exceeds the cost-sharing amount. The out-of-network rate generally means the amount (1) agreed upon by the plan and the provider, or (2) established through an independent dispute resolution (IDR) process that considers specified factors, including the plan’s median in-network rate. As noted above, nonparticipating providers are prohibited from balance billing patients for emergency services.
For more information, see EBIA’s Group Health Plan Mandates manual at Section XIII.B (“Patient Protections”) and EBIA’s Health Care Reform manual at Section XII.B.4 (“Expanded Patient Protections: Surprise Medical Billing (Emergency and Non-Emergency Services)”). See also EBIA’s Self-Insured Health Plans manual at Section XIII.C (“Federally Mandated Benefits”).
Contributing Editors: EBIA Staff.