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    A male doctor explaining the no surprises act to a patient

    What is the No Surprises Act? [Explained]

    5 mins

    As of January 1, 2022, the No Surprises Act went into effect. Designed to protect consumers from unexpected large medical bills, the No Surprises Act requires healthcare providers to give uninsured patients a good faith estimate (GFE) of the services that will be provided to them. 

    The act also protects individuals who are covered by health insurance plans from surprise bills that may occur when seeking some medical services.

    Surprise medical billing has long been a concern for those seeking medical treatment. The Journal of the American Medical Association recently found that 41% of the population had received an unexpected medical bill, while 1 in 5 people reported a surprise bill that arose because the provider was out of network. 

    Especially worrying is that 67% of adults fear being unable to pay their medical expenses. The new law aims to eliminate surprise medical bills and provide patients with the information they need to make informed decisions about their medical treatment.

    What Are Surprise Medical Bills?

    Medical surprise bills occur when there is a discrepancy between what a patient expects to pay and the amount they are billed for after treatment. They are most common when a patient seeks treatment from an out-of-network provider

    Surprise billing often results from the provider billing the difference between what was covered by the in-network plan and the retail price of the services. 

    For example, if a patient obtains an X-ray through an out-of-network provider, their plan may have covered an initial amount of $100. However, if the retail price of the X-ray was $500, the provider may bill the uncovered portion of $400 to the patient. 

    This is known as unexpected balance billing or surprise billing. It’s most common when patients seek emergency services and are treated by out-of-network providers while in the hospital.

    How Are Those with Health Insurance Affected by the New Law?

    Those with health insurance will gain protection when they seek emergency services and certain non-emergency treatments. Most treatments you obtain through emergency services, even if they come from an out-of-network provider, must bill according to your healthcare plan’s in-network coverage. 

    If you seek treatment from an in-network provider that uses out-of-network technicians during the services you receive, they will be unable to bill you according to out-of-network rates. Instead, they will need to comply with the in-network costs established in your medical coverage plan.

    What Is the Impact on Those Who Don’t Have Health Insurance?

    Those who don’t have health insurance or who have coverage but choose to self-pay are entitled to receive a good faith estimate of the cost of their treatment. 

    The estimate is not required to be 100% accurate, but it must account for all foreseeable charges associated with the services to be provided. It should be entirely personalized for the patient’s care. 

    Thus, if a cost may vary because of some characteristic of the patient, this must be accounted for in the estimate. Providing the uninsured person with a copy of how much they can expect to pay will help them make an informed decision before accepting medical care. 

    What Must a Good Faith Estimate Include?

    The Department of Health and Human Services is expected to provide all health providers with a template that they can use for preparing good faith estimates. For now, all estimates should include a minimum of five pieces of information:

    • Patient name

    • Date of birth

    • Itemized list of treatments or services to be provided and their cost

    • Names of all providers who will participate in treatment

    • Specific disclaimers indicated by law

    All information provided in the estimate must be clear and understandable to the patient. 

    What Happens If the Final Cost of Treatment Varies from the Good Faith Estimate?

    The No Surprises Act has created an arbitration process for disputes regarding good faith estimates and actual billing. If the actual bill is more than $400 over the initial good faith estimate, the patient may file a dispute. The dispute must be filed within 120 days of receiving the medical bill. 

    Once a dispute has been filed, no further collection activity can occur regarding the bill in question until the claim is resolved.

    Will the No Surprises Act Apply to Those on Medicare, Medicaid, or Other Plans?

    Those who receive health insurance through Medicare, Medicaid, Tricare, Indian Health Services, or the Veterans Health Administration already have protection from surprise billing. They obtain in-network health care from all participating providers, and there are no out-of-network costs associated with their plans.

    Final Thoughts

    The No Surprises Act will attempt to reduce the level of unexpected medical debt that many Americans fear. In the past, surprise billing could result in unanticipated excess medical costs. Now patients will be able to have a level of certainty about the expenses they will incur when receiving medical treatment.

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    Derek Bettencourt
    Sales Leader, Benefit Solutions at Bennie

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