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What Is Surprise Balance Billing, and What Does Our Health Plan Have to Disclose About It?



QUESTION: What is surprise balance billing, and what must our group health plan disclose about it?

ANSWER: Balance billing occurs when a provider bills a covered individual for charges disallowed by the plan because the charges exceed the plan’s allowed amount. It occurs only with out-of-network providers since in-network providers have agreed to accept a negotiated rate as payment in full for their services, and there is no outstanding balance after the plan and participant have each paid their share of the negotiated rate. The No Surprises Act, enacted as part of the Consolidated Appropriations Act, 2021 (CAA), added protections against balance billing for certain emergency, air ambulance, and non-emergency out-of-network services received at network facilities (see our Checkpoint article). In these situations, patients often do not expect, or have little control over, balance billing, resulting in “surprise billing” for services. When applicable, the CAA limits participant cost-sharing to in-network levels, requires such cost-sharing to count toward in-network deductibles and out-of-pocket maximums, and mitigates surprise billing by prohibiting balance billing on CAA-covered items and services. (For more information about the CAA’s surprise billing protections, see our Checkpoint Question of the Week.)

Health plans and insurers must provide information in plain language about the CAA’s surprise medical billing protections, including the balance-billing prohibition, along with information on any applicable state law protections against balance billing and how to contact appropriate state and federal agencies if a provider or facility has violated the restrictions. These transparency disclosures must be made publicly available and posted on a public website of the plan or insurer. Notably, the disclosures also must be included with each explanation of benefits (EOB) for an item or service with respect to which the surprise medical billing requirements apply. To facilitate compliance, the agencies have issued model notices and regulations that lay out the process for providing them (see our Checkpoint article). The agencies consider use of the model notice in accordance with the accompanying instructions to be good faith compliance with the disclosure requirements, if all other applicable requirements are met (see our Checkpoint article).

For more information, see EBIA’s Health Care Reform Manual at Sections XII.B.3 (“Surprise Medical Billing: Emergency and Non-Emergency Services”) and XXXVII.E (“Surprise Medical Billing Transparency Disclosures”). See also EBIA’s Self-Insured Health Plans manual at Sections XIII.C (“Federally Mandated Benefits”) and XV.D (“Designing Cost-Sharing Features”).

Contributing Editors: EBIA Staff.

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