On July 1, the U.S. departments of Health and Human Services (HHS), Labor, and the Treasury released an interim final rule (IFR) prohibiting many forms of balance billing and surprise billing.
The rule is now open for comment and will take effect on Jan. 1, 2022, for healthcare providers and facilities. This rule is an attempt to bridge the gap between the patchwork of state laws that currently exist to provide more financial protection for patients.
The most common example of surprise billing happens when a patient goes in for surgery at an in-network facility but receives a bill for services from an anesthesiologist who is out-of-network, unbeknownst to the patient. Another common example occurs when a patient is airlifted or brought via ambulance to their nearest emergency room for care, and that ER is not in-network. The patient will then receive a large bill for emergency services.
Patients have complained about surprise billing for years. In 2017, Minnesota attempted to address the problem by passing its own surprise billing law. However, it does not apply to emergency services, self-insured plans, or services rendered by an out-of-state physician. The IFR is much more expansive than Minnesota’s laws, covering emergency services and all out-of-network charges without advance notice.
Most notably, the IFR bans surprise billing for emergency services, requiring them to be treated on an in-network basis without prior authorization requirements. The rule also bans high out-of-network cost-sharing for emergency and non-emergency services, and bans out-of-network charges for ancillary care, such as an anesthesiologist or assistant surgeon so long as the care is delivered at an in-network facility.
Questions remain about how the federal legislation will impact existing state legislation. The IFR states that a “specified state law” will preempt the federal legislation. A specified state law is one that both protects patients from surprise medical bills and provides for a method of determining the total amount payable.
Additional guidance is needed to help states determine whether their law is considered a “specified state law” and how narrower state laws will interact with the federal legislation. Minnesota’s surprise billing law would seem to qualify for preemption. It is drafted more narrowly than the IFR and does not apply to emergency services.
Additional information can be found on this FAQ
released by CMS.