CAA’s “No Surprises Act” - Changes to Health Plans Coming in 2022
In late December 2020, the Consolidated Appropriations Act (CAA) was signed into law. The bill’s $2.3 trillion price tag is one of the largest spending measures ever enacted in American history, and also the longest bill ever passed by Congress.
The CAA contained some of the most significant COVID-19 relief since April 2020’s CARES (Coronavirus Aid, Relief, and Economic Security) Act with about $900 billion of relief to taxpayers, businesses, and the economy. It also included a myriad of different legislative items impacting an array of sectors, not directly related to the COVID-19 pandemic. One of those sectors is the health care and health insurance industries.
The CAA contains three major sections of importance to health insurance brokers and their clients, all of which relate to health plans. One of those sections allows employers optional flexibilities for their Health Flexible Spending Accounts (FSAs) and Dependent Care FSAs. Another section contains new requirements for transparency, which will require “covered service providers” to create and release written disclosures describing direct or indirect brokerage compensation to plan fiduciaries. The third section is the remainder of the items in the “No Surprises Act,” as contained within CAA, which provides protections for consumers against surprise medical billing.
These CAA changes are deep and far reaching. At the time of this article’s publication in May 2021, regulations are not yet available for these changes. Regulations tell us how a new law will be facilitated, administered, and enforced. As regulations are released, we will learn more about these changes and how to implement them. For now, we only have the letter of the law itself, which is what this column is based on. We focus this month on the federal “No Surprises Act” changes related to surprise-billing, some of which resemble language in California’s 2017 AB 72 law. Other CAA changes will be detailed in future columns, especially on transparency requirements, as further regulations become available.
Surprise bills arise when a patient receives care at an in-network facility by an out-of-network provider; or when a patient receives emergency services, without having a say in where they are treated under such emergency conditions. Surprise bills are often shockingly expensive, and hard-hitting to health care consumers. The CAA’s No Surprises Act battles such occurrences, and implements changes which apply to individual- and group-health plans (grandfathered and non-grandfathered) with effective dates beginning on or after 1/1/2022.
The key provisions of the No Surprises Act on surprise billing are as follows; keeping in mind that this article is only a brief summarization of major items within the law and is not a comprehensive analysis.
Balance Billing: Surprise bills must be covered at in-network rates. Health plans may not extend surprise medical bills for emergency services rendered by out-of-network providers/facilities, air ambulance services (if the plan provides air ambulance services facilitated by in-network providers); and services provided by out-of-network providers at in-network hospitals or facilities. Ground ambulance services will be impacted, too; however, details are pending. For these services and circumstances, out-of-network providers may not balance bill patients (or hold patients liable) for any amounts exceeding in-network charges.
Health plans must keep their provider directories up to date, and verify they are accurate every 90 days. Additionally, carriers must also establish a “response protocol” system, allowing them to respond to covered individuals, within a newly required one-business-day timeframe, when asked whether a provider or facility is considered “in-network.” If incorrect information is given, a health plan must cover the services rendered by that provider at in-network rates.
Health plans must provide price comparison tools to consumers. These tools, which must be available by phone and internet, allow covered individuals and in-network providers to compare expected cost-sharing amounts for covered services.
Health plans must provide advanced Explanation of Benefits (EOBs) to consumers upon request, and to consumers proactively before scheduled care. For health plans with effective dates beginning in 2022, consumers may request advanced EOBs to see how services would be covered before they are provided. Health plans must provide advanced EOBs explaining benefits and estimates of cost-sharing before scheduled care. They must furnish such good-faith estimates, within three business days, of what the plan will pay and what the patient cost might be for covered services (whether the provider is in-network or out-of-network). For services scheduled within 10 days, the advanced EOB must be distributed within one business day. This may be challenging for carriers, since the timelines are tight and because it can be difficult to predict charges for any related issues that may be discovered during the procedure with the doctor.
Providers must also furnish good-faith estimates of expected charges for services — including related billing and diagnostic codes in advance of a service. Providers are also expected to furnish charges for services that are reasonably expected alongside the scheduled services. This is likely to combat the related challenges mentioned in the aforementioned advanced-EOB section.
Health plans must notify individuals when a provider/facility leaves its network, and must provide related transitional continuity of care to patients in some circumstances. Required by the No Surprises Act, health plans must notify covered individuals when a provider/facility leaves a plan’s network(s). For patients receiving certain types of ongoing care from affected providers or facilities, health plans must provide up to 90-days of transitional coverage (or until treatment ends) by those providers, at in-network rates. Such transitional coverage is generally available for patients being treated for serious/complex health conditions, inpatient care, non-elective surgery, pregnancy and terminal illness.
Carriers must update and re-release physical and digital ID cards, which (for plan years beginning January 2022 or later) must list plan deductibles and out-of-pocket maximum limits.
Regulators are working out the details of these new changes, and are expected to release regulations by summertime. Carriers will only have a few short months to implement changes in their health plans, and will likely be challenging to execute. As further regulations are released, we will keep you updated. Stay tuned for further columns to follow over the coming months on these CAA items, and the transparency item included in the law as more information is released by enforcing agencies and regulators.
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