Question: What is surprise balance billing? And what does our group health plan have to disclose about it?

Answer: Balance billing occurs when a provider bills a covered individual for charges disallowed by the plan because the charges exceed the plan’s allowed amount. It occurs only with out-of-network providers since in-network providers have agreed to accept a negotiated rate as payment in full for their services — and there’s no outstanding balance after the plan and a participant have each paid their share of the negotiated rate.

Law Passed in 2021

The No Surprises Act was enacted as part of the Consolidated Appropriations Act (CAA) in 2021. It added protections against balance billing for certain emergency, air ambulance and nonemergency out-of-network services received at network facilities.

In these situations, patients often don’t expect, or they have little control over, balance billing — resulting in “surprise billing” for services.

When applicable, the CAA:

• Limits participant cost-sharing to in-network levels,
• Requires such cost sharing to count toward in-network deductibles and out-of-pocket maximums, and
• Mitigates surprise billing by prohibiting balance billing on CAA-covered items and services.

Health plans and insurers must provide information in plain language about the CAA’s surprise medical billing protections. This includes providing information about the balance-billing prohibition, along with information on any applicable state law protections against balance billing and how to contact appropriate state and federal agencies if a provider or facility has violated the restrictions.

Public Disclosure

These transparency disclosures must be publicly available, which includes being posted on a public website of the plan or insurer. Notably, the disclosures also must be included with each explanation of benefits for an item or service with respect to which the surprise medical billing requirements apply.

To facilitate compliance, federal agencies have issued model notices and regulations that lay out the process for providing them. The agencies consider use of the model notice in accordance with the accompanying instructions to be good faith compliance with the disclosure requirements, if all other applicable requirements are met.

What Is Surprise Billing IDR?

Question: We’ve heard that group health plan claims for certain services must be resolved under federal independent dispute resolution (IDR) rules. What is IDR and what claims does it apply to?

Answer: The No Surprises Act protects individuals from surprise bills for certain out-of-network services. It establishes an IDR process under which out-of-network providers and health plans may resolve claim disputes. Requirements apply to emergency items and services provided in a hospital emergency department (including an outpatient department providing emergency services) or in an independent, freestanding emergency department geographically distinct and licensed separately from a hospital under state law. The rules also apply to nonemergency items or services furnished by a “nonparticipating provider” (in other words, an out-of-network provider or one that doesn’t have a contractual relationship with the plan) at an in-network facility, as well as to out-of-network air ambulance services.

The IDR process may be initiated by out-of-network providers, plans and insurers only after an unsuccessful “open negotiation.” Providers and plans have 30 days, beginning on the day the provider receives an initial payment or denial notice from the plan, to initiate open negotiations and determine an agreed payment amount. If the open negotiations don’t result in an agreed amount, the provider or plan may pay the required fees and initiate an IDR process through the IDR Portal maintained by the U.S. Department of Health and Human Services. The process allows the disputing parties to submit payment offers and supporting documentation to a certified IDR entity, which then issues a binding determination. This federal process involves paper review, without hearings, and the certified IDR entity must make its determination of the payment amount for a qualified IDR item or service no later than 30 days after the date the entity is selected.