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Don’t let the No Surprises Act surprise you

Christopher Goforth (christopher.goforth@ankura.com) is a Senior Director at Ankura in New York City. Kevin Pasciak (kevin.pasciak@ankura.com) is a Director and Chris Tonellato (christopher.tonellato@ankura.com) is a Senior Associate at Ankura in Chicago, IL.

After years of deliberation, the federal government enacted the No Surprises Act[1] (the act) into law as part of the Consolidated Appropriations Act of 2021 (Omnibus legislation). The act is a consumer protection law that seeks to prevent unanticipated medical bills for patients who lack meaningful choice in providers for certain services. Out-of-network providers and facilities generally charge higher rates for items and services than in-network providers/facilities. As such, the cost-sharing obligations of patients for out-of-network items and services increase accordingly. Balance billing (sometimes called surprise billing) is a medical bill from a healthcare provider billing a patient for the difference between the total cost of services being charged and the amount the insurance pays. Balance billing by out-of-network providers occurs in both emergency and nonemergency settings, and it can have an immense financial impact on patients. The act aims to protect patients from the most prevalent types of items/services that patients receive balance bills for by reducing these out-of-network bills. The law mandates the coverage of certain out-of-network bills, limits the cost-sharing amount that individuals can be held liable for for out-of-network items and services, and details requirements for providers and health plans to promote charge rate transparency.

The act has broad application to both health plans and providers. The law requires healthcare providers, facilities, and insurers to take affirmative steps to ensure compliance with the act’s provisions. The legislation has extensive compliance, operational, and financial impact. The Departments of Health & Human Services, the Treasury, and Labor, and the Office of Personnel Management have been tasked with issuing more detailed regulations and guidance for the implementation of certain provisions of this law. The first interim final rule, in a series of anticipated rulemaking, was published in the Federal Register on July 13, 2021.[2] It became effective September 13 and is applicable to health plans, health benefit plans, providers, facilities, and providers of air ambulance services. As the regulations are published in a phased approach, organizations should prepare now to ensure meaningful compliance. Noncompliance with the act is subject to federal enforcement, starting January 1, 2022.

This article is intended to serve as a primer for compliance programs with respect to this reformative legislation with a particular focus on healthcare providers, facilities, and health plans. Here, we frame the discussion with the rationale for this consumer protection, then outline the key provisions that will affect healthcare providers, facilities, and health plans and the essential actions that they should take to promote compliance and manage their risks.

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