Starting January 1, 2022, the No Surprise Act will serve to protect patients from surprise medical bills from providers elected under employer health plans by putting the burden of negotiating surprise bills between the provider and the plan. Employers should comply with the Act’s requirements or run the risk of paying out millions of dollars in reprocessing denied claims and punitive damages in private civil actions, or hefty federal penalties and possible criminal punishment in federally initiated action.

What’s A Surprise Bill & Its Impact?

The term “surprise bill” is a bill from an out-of-network provider for the difference between the out-of-network fee and the amount covered by the patient’s health insurance after co-pays and deductibles. This occurs typically in emergency settings where a patient cannot select the emergency room, his/her treating physicians, or ambulance providers. It also occurs when a patient schedules treatment from an in-network provider, such as surgery but that surgeon selects out-of-network providers for anesthesia, pathology, or the alike. Thus, it comes as probably more of a shock than a surprise when a patient is hit with these significant medical bills. Both providers and patients then have the time consuming task of negotiating coverage of these bills with the patient’s health plan, or worse, the patient being stuck with the bill.

Background on the No Surprise Act

The No Surprise Act will put the burden of negotiating surprise bills between the provider and the plan through a dispute resolution process if it cannot be resolved within 30-days. The Act also requires health plans to create procedures to follow the Transparency in Coverage final rule, issued on October 29, 2020 by the Department of Health and Human Services. That final rule sets forth requirements for group health plans and health insurance issuers in individual and group markets to disclose cost-sharing information online allowing participants to understand the exact cost of in and out of network services¹.

What Employers Should Do Now

In a recent federal case in California, United Behavioral Health failed an attempt at dismissing claims from a group of five patients who claim they were surprise billed for out-of-network health coverage after UBH failed to reimburse providers under the terms of the patient’s health plan coverage². It is important for employers to provide their employees who opt into their health plans detailed information about coverage and costs.

Our Newmeyer Dillion Healthcare attorneys can help navigate employers’ duties and protect against pitfalls. Contact Partner Savera Sandhu for more information.

¹ The final rule can be found here: https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/CMS-Transparency-in-Coverage-9915F.pdf
² The case is LD et. al. v. United Behavioral Health et al.: case no: 4:20-cv-02254 (U.S. District Court California, Northern District).