A new law went into effect January 1, 2022, to protect patients from surprise billing for emergency services, ban out-of-network cost sharing, and ban out-of-network charges and balance bills for supplemental care. The law also requires that healthcare providers and facilities provide the patient with an easy-to-understand notice explaining that out-of-network healthcare costs could be more expensive.
What is surprise billing?
When you see a doctor or other healthcare provider, you may owe certain out-of-pocket costs, such as a copayment, coinsurance, and/or a deductible. You may have to pay the entire bill if you see a provider or visit a healthcare facility that isn’t in your health plan’s network.
“Out-of-network” describes providers and facilities that haven’t signed a contract with your health plan. Out-of-network providers may be permitted to bill you for the difference between what your plan agreed to pay and the full amount charged for a service. This is called “balance billing.” This amount is likely more than in-network costs for the same service and might not count toward your annual out-of-pocket limit.
“Surprise billing” is an unexpected balance bill. This can happen when you can’t control who is involved in your care—like when you have an emergency or when you schedule a visit at an in-network facility but are unexpectedly treated by an out-of-network provider.
Example:
| Service "A" Balance Billing | Service "A" No Balance Billing |
| Out of Network | Out of Network |
| Patient Responsibility: 50% | Patient Responsibility: 50% |
| Provider's Charge: $500.00 | Provider's Charge: $500.00 |
| Payer's Allowable: $300.00 | Payer's Allowable: $300.00 |
| Patient Balance Due: $350.00 | Patient Balance Due: $150.00 |
|
Includes difference between provider's charge and payer's allowed amount |
Only allowed to bill patient the balance between what was paid by the insurance, and the insurance's allowed amount |
Why was this law rolled out?
This was a Public Health Service Act designed to protect patients from unexpected healthcare charges.
When did this take effect?
January 1, 2022
Who is impacted?
All providers of healthcare services, equipment, and supplies.
How does this impact providers of HME & Infusion?
- Under the new act, providers are only allowed to bill up to what was allowed by the insurance (regardless of network status).
- Providers should pay special attention during intake to network status.
- If the provider is not in network, it is recommended that thorough investigation take place to determine if the in-network rate is sufficient to cover cost of care.
- If the provider is not in network, it is recommended that thorough estimate of cost be provided to the patient. Examples:
- In-network benefit for the patient is 80%
- Out-of-network benefit for the patient is 50%
- The patient would be best served (have lower out-of-pocket) by visiting an in-network provider.
Where do providers need to make changes in their business and systems to account for this new law?
- Cash posters should only be transferring balances to the patient up to the EOB specified allowed amount.
- Intake teams should be thorough in investigating:
- Network status
- Payer/plan-allowed amount for products, equipment, and services provided
- Providers should display a notice at each practice facility letting patients know that out-of-network care can result in higher out-of-pocket costs.
Written by: Rachel Schools, Senior Consultant, Prochant
Prochant is the leading reimbursement firm with a dedicated focus on HME and pharmacy. We have a proven track record of helping HME and pharmacy providers meet their financial goals. Our scalable solutions, years of experience, and advanced technology provide best-in-class results to the healthcare community. Headquartered in Charlotte, North Carolina, our client base includes national HME and pharmacy providers and health systems.