Federal Ban on ‘Surprise’ Medical Bills Coming January 1

WASHINGTON — A ban on so-called “surprise” medical bills —  unexpected, exorbitant health care bills for out-of-network care that arrive on insured patients’ doorsteps, oftentimes when they are still at their most vulnerable – is on pace to go into effect Jan. 1, administration officials said Thursday.

The announcement came as the Departments of Health and Human Services, Labor, Treasury and the Office of Personnel Management issued an interim final rule to implement the No Surprises Act, a consumer protections act passed in 2020.

“No one should have to go bankrupt over a surprise medical bill,” HHS Secretary Xavier Becerra said in a written statement. 

“With today’s rule, we continue to deliver on President Biden’s Executive Order Promoting Competition in the American Economy by promoting price transparency and exposing inflated health care costs. Our goal is simple: giving Americans a better deal from a more competitive health care system,” he said.

Surprise bills often arise when patients are stricken with a medical emergency and wind up having to have treatment by an entity that is outside their insurance plan’s provider network.

Other surprise bills arise when an out-of-network clinician takes part in a surgery or procedure conducted at an in-network hospital. 

The rules released Thursday spell out for the first time a key part of the new system: The dispute resolution process that hospitals, doctors and insurers will use to haggle over fees, without dragging patients into it.

When an insurer and a service provider disagree over fair payment, either side can initiate a 30-day negotiation process. If they still can’t come to an agreement, they can take the matter to an independent arbitrator.

The arbitrator will use as a guide a set amount intended to balance the value of the medical services provided with the goal of keeping costs reasonable. 

Clear justification will be required for the final payment to end up higher or lower than originally proposed.

There will also be a new way for uninsured patients who pay their own way to get an estimate of charges for medical procedures, as well as a process for them to resolve billing disputes.

It also adds protections in the external review process so that individuals with job-based or individual health plans can dispute denied payment for certain claims.

The Department of Health and Human Services made progress toward implementation of the law by issuing two rules earlier this year. 

In early September, the department and the federal Office of Personnel Management issued a rule to help collect data on the air ambulance provider industry, and in July, the department issued its first rule  on consumer protections against surprise billing.

Collectively, these rules take effect Jan. 1, 2022, and ban surprise billing for emergency services, as well as certain non-emergency care provided by out-of-network providers at in-network facilities, and limit high out-of-network cost-sharing for emergency and non-emergency services for patients.

“Price transparency is a reality in almost every aspect of our lives except health care,” said Centers for Medicare & Medicaid Services  Administrator Chiquita Brooks-LaSure in a written statement. 

“The Biden-Harris administration is committed to changing this. With today’s final rule, we are requiring health care providers and health care facilities to provide uninsured patients with clear, understandable estimates of the charges they can expect for their scheduled health care services,” she said.

The departments will certify independent dispute resolution entities to conduct payment determinations on a rolling basis. Entities interested in becoming certified by Jan. 1, 2022, should submit their applications by Nov. 1, 2021.

In a joint statement, Rep. Frank Pallone, Jr., D-N.J., chairman of the House Energy and Commerce Committee, and Sen. Patty Murray, D-Wash., chair of the Senate Health, Education, Labor and Pensions Committee, said, “No one should be afraid the care they need will come with a financially devastating surprise medical bill they can’t afford. 

“We passed the No Surprises Act to protect patients from exorbitant surprise bills for unexpected, out-of-network health care, and we are pleased to see the Biden administration working hard to make good on that promise,” they said. “Today’s rule implements the No Surprises Act just as we intended and is a significant new protection for families across the country that will save countless patients from being forced to foot the bill for care they thought was covered by their insurance. It establishes a fair payment resolution process between providers and insurers while finally taking patients out of the middle.”

But there are those who disagree. Among them is Rep. Brad Wenstrup, R-Ohio, who is a member of  the GOP Doctors Caucus.

“This HHS Second Rule on surprise billing is a disaster for patient access,” Wenstrup said in a written statement. “Congress was very clear that we did not intend to create a de facto benchmark for negotiations when creating the arbitration process in the historic, bipartisan No Surprises Act. 

“In crafting the legislation, Congress protected patients and created a balanced process to settle payment disputes between health care providers and insurers,” he continued. “In June, I led 96 of my colleagues from both sides of the aisle in calling upon the administration to reflect congressional intent as they implemented these critical patient protections. 

“Unfortunately, this rule does not meet our intent. If unchanged, this rule will disincentivize insurance companies from keeping providers in their networks, limiting care for Americans and threatening the health and safety of our nation,” Wenstrup said.