Due to legislation passed on December 22, 2020 as part of the COVID relief plan, patients who receive emergency medical services will have peace-of-mind due to fewer unexpected health care costs. As part of the “No Surprises Act,” (also known as the Act) patients will not be responsible for out-of-network charges associated with ambulance services, either emergency or air. The Act, which applies to fully-insured and self-insured group health plans, also extends to hospital-based services. While there are slightly different regulations governing emergency and non-emergency procedures, this legislation is expected to give patients a reprieve from the majority of out-of-network service charges at in-network facilities.

Many patients get caught with large bills when they procure medical services — either emergent or non-emergent — without prior approval from their insurer. Of course, The Act does not entirely absolve patients of payment since they are still responsible for the median amount of in-network fees for that service. Among others, this includes charges that are non-fee-for-service. Yet, another positive takeaway is that any payments patients make according to an in-network rate schedule will be applied to their plan’s deductible and out-of-pocket maximum.

In accordance with the Act, associated dealings between insurance companies and health care facilities will follow a two-step arbitration process. Resolution will begin with each party proposing an initial payment amount. After this information is shared, an adjudicator will select one figure out of the two offered. Aside from having some room for negotiation afterward, the decision is binding once the arbitrator has made their selection.

Starting January 1, 2022, these notable improvements in health care industry pricing transparency will be compounded by additional regulations passed under the Act, including:

  • Provision of an Explanation of Benefits (EOB) at least three days before any elective service to delineate the cost of the procedure
  • Plan ID cards with clear figures that outline deductibles and out-of-pocket maximums for  both in-network and out-of-network facilities
  • An online comparison tool and comprehensive, up-to-date directory that each coincide to clearly state prices, services, and facilities according to each plan’s benefits

Another important aspect of this legislation requires all health plans to confirm and update their directory with clinician and facility information every 90 days. This means that unverified practitioners will be removed from the directory and all updates will be made in a timely fashion (no later than two days after receipt).

Once put into place, the Act will give patients the information they need to confidently seek health care without fear of financial loss. As a result, individuals will likely engage in a greater number of elective services, not only to address acute health concerns in a timely manner, but also to more effectively and safely manage chronic issues. Bringing recurrent conditions under control and remedying new health issues will decrease the risk of complications, which will both result in lower resource utilization and decreased health care expenditures. This gives insurance companies more opportunities to effectively connect their members with providers within or outside of their network.