Even though Surprise Billing requirements have been in effect since 2021, we're due for an update on where the requirements stand, and what kind of legal challenges the regulations are facing now.
In this blog, we'll review what Surprise Billing means, what the regulations are around it currently, Surprise Billing's legal battles, and what it means for your practice.
Surprise Billing Requirements
Surprise Billing occurs when an insured person inadvertently receives care from an out-of-network provider. Surprise Billing requirements consists of two main regulatory components to prevent these unwelcome surprises:
- Prohibition on balanced billing:
- Billing patients for the difference between the amount the provider charges and the amount that the individual’s plan or coverage will pay plus the individual’s cost-sharing amounts.
- This regulation applies to:
- Nonemergency care provided by out-of-network providers at an in-network hospital or ASC, unless the patient has consented to be treated by an out-of-network provider and agrees to be balance billed.
- Out-of-network emergency services provided at a hospital emergency department, or independent freestanding emergency department, or by air (not ground) ambulance.
- Good Faith Estimate (GFE):
- Provision of notification that outlines an uninsured, or self-pay, individual's expected charges for a scheduled or requested item or service.
- This regulation applies to all healthcare providers.
Both components are subject to Independent Dispute Resolution (IDR) processes if issues arise. Please note that some states have more restrictive regulations.
Lawsuits and Revisions to Surprise Billing
Back in 2021, the American Medical Association (AMA), the American Hospital Association (AHA), the Texas Medical Association (TMA), and four other parties separately sued the federal government over the Surprise Billing requirements. The lawsuits all pertained to a specific aspect of the interim IDR process: the use of the Qualified Payment Amount (QPA) as the presumed appropriate out-of-network payment amount. The QPA, a metric developed and set by health insurance companies, is the median of contracted rates for a specific service in the same geographic region within the same insurance market. The concern is that using the QPA as the default payment puts too much leverage in the hands of payers and does not allow providers the opportunity to cover their costs.
These lawsuits all argued that this part of the rule is arbitrary and went beyond the scope of the original legislation that defined the Surprise Billing requirements. In February 2022, a federal judge struck down the use of the QPA as the default payment amount in the IDR process in response to TMA's lawsuit.
In August 2022, a new final rule was published to the Federal Register and the AHA and AMA dropped their suits. So all the drama is over, right?
Not So Fast... Another Lawsuit!
This new final rule changes the language in the IDR process to include both the QPA and "other factors" in determining the appropriate payment. This is not the more neutral default aspired to by those who sued. TMA filed suit again, arguing that the new final rule is not meaningfully different from the one that was struck down in court. Several medical organizations have filed amicus briefs, or statements in support of the plaintiff and more are expected soon.
What Does This Mean For Your Practice?
We know Surprise Billing's legal battles have been all over healthcare news, but the regulations are still in effect. It's important that you know what the regulations are and that you are complying with them.
To simplify making Good Faith Estimates (GFEs), consider using a patient experience platform like Promptly to automate these requirements. Their platform calculates out-of-pocket costs while taking into account payer allowable, remaining deductible, co-pays, and more. The GFE can be sent to the patient electronically along with a payment link to save time and increase timely collections.
We'll update you here if anything meaningfully changes on this issue.
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