2021 COVID Relief Act Addresses “Surprise” Out of Network Billing

In the latest COVID-19 relief effort, the Consolidated Appropriations Act, 2021 was passed at the end of 2020. In the Act, Congress included a legislative solution (the “No Surprises Act”) designed to end “surprise billing” for those patients who receive unexpected medical bills, sometimes for tens of thousands of dollars, from out-of-network medical providers, doctors and air ambulance services. The issue of surprise medical bills has been especially relevant during the COVID-19 pandemic, which has increased the occurrence of surprise bills at a time when people are struggling with unexpected medical and other costs.


The Act will generally be effective in 2022 on a prospective basis and will apply to fully-insured plans and self-funded plans. Many of the Act’s requirements will be dependent on more clarity that will be provided through the Federal rulemaking process, which will begin by July of 2021. As further details emerge, we will provide updates accordingly.


Below is a summary of the headlines of the No Surprises Act.


Participant Protections

  • Patients will be held harmless from surprise medical bills, including from air ambulance providers, by ensuring they are only responsible for their in-network cost-sharing amounts, including deductibles, in both emergency situations and certain non-emergency situations where patients do not have the ability to choose an in-network provider. Notably, the Act does not extend protections to the far more commonly used ground ambulance services.

  • In certain non-emergency situations, a facility or provider will have to give the patient a detailed notice and an estimate of charges, generally 72 hours prior to the patient receiving out-of-network services and obtain the patient’s consent to receive out-of-network care. Otherwise, the patient will only be held liable for their in-network cost-sharing amount.

  • Plans and insurers will have to provide advanced billing and personal cost information to participants based on the contracted rate the plan has established with the provider, along with good faith estimates of the participant’s share of the cost of service and a good faith estimate of the amount that the participant has already incurred toward meeting the plan out of pocket maximums

  • Plans and insurers will have to add deductible, out of pocket maximum and consumer resource contact information to any paper or electronic insurance card issued to enrollees.

Payment Dispute Resolution

  • The Act creates a framework that takes patients out of the middle of billing disputes, and allows providers and plans/insurers to resolve payment disputes without involving the patient.

  • Within 30 days of receiving a bill from an out of network provider, a plan or insurer will be required to either deny a claim or make an initial payment to the provider.

  • Plans and insurers will have to negotiate with out of network providers if they dispute the provider’s fee. If the parties cannot reach an agreement, they can utilize an Independent Dispute Resolution (IDR) process created by the Act. There is no minimum payment threshold to enter IDR, and claims may be batched together to ease administrative burdens.

  • If the parties choose to utilize the IDR process, both parties would each submit an offer to the independent arbiter. When choosing between the two offers the arbiter is required to consider the median in-network rate, information related to the training and experience of the provider, the market share of the parties, previous contracting history between the parties, complexity of the services provided, and any other information submitted by the parties.

  • The losing party is responsible for paying the administrative costs of arbitration (whereas, if the case is settled before arbitration, the costs would be split equally unless otherwise agreed).

  • New auditing guidelines of plans and insurers will be established to ensure that plans are complying with the new surprise medical billing requirements.

State Laws May Create Confusion

More than 30 states have enacted some type of surprise billing protections, but only 17 are considered comprehensive (including New Jersey and New York, for example). However, the effect of these state laws is limited as they do not apply to self-insured employers. Given the No Surprises Act, state lawmakers may eventually alter their legislation or adopt new proposals to avoid confusion between self-funded employers and fully insured plans subject to state law.


Looking Forward

While the No Surprises Act has been praised by patient advocacy groups, the full effects of the new rules on patients’ access to and quality of care, and health care costs more generally, will need to be evaluated over time. There has long been agreement on the importance of the protections, but there remain concerns about the burden on all parties. The American Hospital Association released a letter detailing the “unworkable” billing processes and the “duplicative and costly” transparency provisions. Likewise, the American Medical Association and the Association of American Physicians & Surgeons also voiced concerns, noting the complexity of the IDR process and calling the Act “a surprise attack on patients’ access to independent physicians.”


The payment resolution process and numerous reporting requirements included in the Act offer many opportunities for implementation concerns which will need to be addressed by the incoming administration. Regulation and guidance will be needed to guide the yet to be identified eligible arbitrators’ decisions and to help ensure that arbitration will work fairly. We expect more clarity as the Federal rulemaking process begins later in July of 2021. We will provide updates as further details emerge. Please contact your Conner Strong & Buckelew account representative toll-free at 1-877-861-3220 with any questions. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.

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