It's time for hospitals and health systems to start getting ready for the surprise billing ban that takes effect next year.
President Joe Biden's administration published an interim final rule last month that covers the basics, but left out essential details about how the No Surprises Act will work in practice. The regulation bars surprise bills for emergency care, high cost-sharing for out-of-network services, out-of-network charges from ancillary providers such as anesthesiologists or assistant surgeons, and out-of-network charges from providers who don't notify patients they are not in-network.
Despite the uncertainty, providers need to start preparing for the new rules now—and most aren't ready.
"It's really an all-hands-on-deck project. Providers are putting together cross-functional teams, including legal, compliance, finance and operations to begin implementation," said Brenna Jenny, partner at law firm Sidley Austin. Jenny was formerly principal deputy general counsel at HHS and CMS' chief legal officer.
Hospitals need to lay the groundwork now because CMS expects them to be in compliance with the surprise billing law on Jan. 1, Jenny said. CMS could give hospitals a shorter leash on surprise billing than they do on other issues because it's consumer-facing and has strong support from politicians.
It's up to hospital leaders to make sure their staff is ready. "This is not going to be an easy thing to implement," Jenny said.
Frontline staff must understand when they can or cannot balance bill patients, including how state laws could appply to them.
Making sure that providers don't accidentally balance bill patients and get consent to do so when it's permissible will require health systems to revamp their workflows.
"There's a pretty strict timeline for the notice and consent process that providers are going to need to operationalize," Jenny said. "Most importantly, and probably most burdensome, is that a provider needs to include a good faith estimate of the amount that out-of-network provider or emergency facility is going to charge the patient."
Health systems will have to communicate with insurers that a patient has agreed to balance billing and provide a copy of the patient's signed notice and consent form.
In addition, providers will have to follow the regulation's disclosure requirements. That includes a summary of the major balance billing prohibitions from the No Surprises Act, additional state requirements and contact information for patients to notify the federal agencies about violations.
Hospitals also need to make provider directories available to insurers. "That's because plans and issuers are required by the No Surprise Act to update provider directories to make sure that patients can readily understand who's in and out of network," Jenny said.
There's going to be a lot of new, crucial communication between providers and payers in their markets, and it's time for those organizations to start talking about how that's going to take place, said Molly Smith, group vice president for public policy at the American Hospital Association.
The AHA is pushing for national communications standards for issues like whether the No Surprises Act covers a patient's health plan, but they are no guarantee. Hospitals and insurers need to be ready to move forward regardless. "That could get incorporated into some existing kind of communication standard transactions but might need a new code or modifier," Smith said.
Hospitals may need to rethink their outsourcing strategy for providers and services, especially if they outsource to providers that don't accept most insurance plans, said Mark Janiszewski, chief product and strategy officer for revenue-cycle management vendor nThrive.
"That's going to be a problem for them," Janiszewski said. "There have been some bad actors out there who sort of do this on purpose, right? They don't accept a lot of insurance, and then they try to bill on a self-pay or full-price basis. That's part of their financial model."
Hospitals must understand ahead of time which of their providers are in-network at the largest insurers in their markets, Janiszewski said. "You could end up with individual surprise billing because a provider is new and hasn't gotten enrolled in that insurance network," he said.
Hospitals should look at their internal processes to ensure that they're referring patients to an in-network provider, Janiszewski said. "I don't think that's something they're really thinking about or checking for right now," he said.
In addition, providers need to determine whether the new surprise billing regulations apply to them and under what circumstances.
"That will change how they do business," said Victoria Wallace, an attorney at law firm Hogan Lovells. "Providers need to analyze their current balance billing practices and see whether those will need to change in any way."
The lack of detail about how the independent dispute resolution process will work is creating headaches for providers, especially if they expect the vast majority of their claims to go through it, Wallace said. Providers should know how to calculate the qualifying payment amount for a given service before they go into arbitration to evaluate whether the arbitrator's proposed payment is correct, Jenny said.
Providers that rely on balance billing because they have trouble going in-network with health plans could be particularly affected, so they need to start considering their options now. That could mean pushing harder to join provider networks, changing what services they offer at specific facilities or directly billing facilities for their services. Independent air ambulances, Holter monitor providers and labs that offer advanced diagnostic testing could be among those who must make the biggest adjustments, Wallace said.
Comments on the interim final rule are open until Sept. 7.