No surprises, please! Finally some clarity around surprise medical bills

The No Surprises Act, passed in July 2021 and going into effect Jan 1, 2022, aims to relieve responsibility of the insured to pay for so-called “balance billing”. Sounds pretty complicated, but you or someone you know may have encountered this issue before. Basically, we experience it as a surprise (possibly giant) medical bill, where we thought the full amount had already been paid or was covered by insurance.

We wanted to summarize the issue for you, and also note the overall implications because this may be one reason that your company’s health plan may have gotten negative marks over the years.

We’ve seen coworkers talk about their “lousy insurance coverage” because they received a surprise medical bill in the mail. As a business leader you are probably aware that surprise bills have little to do with the coverage and plans that you put in place for your employees. But by the time things get ironed out, the damage has already been done.

So here is a brief background on the issue and a summary of the new legislation. With this, you can help your employees put their minds at ease and remind them that their insurance coverage is solid.

The background on insurance coverage and balance billing

Balance billing derives its name from the situation where an out-of-network provider bills a patient directly for the difference, or balance, after the insurance company has paid their part. Usually this is an unexpected bill from a health care provider or facility. This can happen when a person with health insurance unknowingly gets medical care from a provider outside their health plan’s network. And it can happen in both emergency and non-emergency care.

For example, Jane goes into a medical facility, where she always goes for care, and where her provider takes her insurance (in-network). The provider refers Jane for a diagnostic test done in the same in-network medical facility. Unbeknownst to Jane, this testing lab does not take her insurance. So what happens?

The out-of-network provider (the testing lab in Jane’s case) sends a bill to the insurance company anyways. The plan will often pay a reasonable amount towards the bill, and the reasonable amount calculation typically stems from what Medicare would pay for it. This is 30-40% of what the medical providers actually bill. So the rest of the cost just gets passed through to Jane. The lab sends a balance bill directly to Jane – totally to her surprise – and if she doesn’t pay it, they may send the invoice to collections.

Yeah, exactly. This is where your employees become disgruntled about the insurance coverage they get. Though it has nothing to do with you and your business. But still, an angry employee can affect performance and morale.

No Surprises Act practically ends balance billing

This piece of legislation fills the gap created by the ACA described above. After Jan 1, 2022, this type of surprise billing or balance billing will be prohibited for non-emergency services, unless certain disclosure and consent requirements are met. In some cases where they are permitted to bill (after consent), the billing from an out-of-network provider or service is limited to what the in-network cost would be to a patient. For example, air transportation in emergency situations. You won’t get a $40,000 bill in the mail anymore for this.

A good description of the exceptions and an overview of the cost-sharing responsibilities still in the gap after the No Surprises Act can be found here.

For the time being, one of the pieces of advice we give to every group insurance participant is that they should confirm with anyone performing medical services on/for them that they participate as an in-network provider. But this isn’t always possible. Often times a medical provider may “support” you without you being fully aware. In this instance, you may want to repeat to anyone taking care of you that you only want to receive services from in-network providers.

We recommend that you let your employees know about this new law, since it is a good relief for them. It’s enough to just copy this blog post link and share it. Employees: this is a good piece of legislation for you. You don’t need to worry constantly about being duped with a surprise bill. There must be disclosures and consent. Otherwise, no bill!

Suitless plans on keeping our clients updated on the progress of this new law, as well as other updates that may impact individual and group health insurance coverage. If you have more questions about your group health insurance or want to learn more about how you can help your employees take advantage of their group health benefits, contact us at info@getsuitless.com.

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