3 Ways the No Surprises Act Will Change Medical Debt Collection Laws

medical debt collection laws

Did you know that growing healthcare, totaling $140 billion, is the fundamental cause of debt for American families? A substantial chunk of this is due to surprise billing! One-third of insured people report receiving an unexpected additional charge in the past two years. 

A lot of people are worried about being able to pay for their medical bills. Even more so when they receive unexpected medical expenses. This world of unexpected medical bills escalated to a boiling point.

This is the reason why both the federal and state governments have taken notice of it and taken action to remedy it. As a result, Congress signed the No Surprises Act into law to resolve this issue.

As a result of the new No Surprises Act, medical debt collection laws have changed. It has changed the manner in which healthcare practitioners can charge their patients.

Medical Debt Collection Laws and the No Surprises Act

The federal government estimated that 39.7 million emergency visits occur yearly. 18% or 7.1 million patients involved at least one out-of-network claim.

The No Surprises Act was enacted on January 1, 2022. It protects patients from surprise bills for out-of-care in urgent and non-emergency situations. Emergency and ancillary care account for roughly a fifth of out-of-network charges and a sixth of in-network hospital stays.

For example, a Department of Health and Human Services report, patients paid an average of more than $1,200 for anesthesiologists’ facilities. Also, they paid $2,600 for surgical assistants’ amenities and $750 for childbirth-related care in a hospital setting.

Patients have no choice but to pay for these unexpected treatments or risk having their credit reports tarnished. While most health insurance policies cover some costs, consumers are liable for the rest.

Many patients receive care outside their health plan’s network without their knowledge. This is referred to as “surprise billing”. The law establishes additional standards and limitations for a variety of billing instances. The ‘No Surprises Act’ focuses on three primary types of care, which are those in which patients are most susceptible to surprise billing: 

1. Emergency Care Provided by Facilities Outside of the Network

Patients in an emergency care situation who have little or no choice in obtaining care are almost always subjected to extra charges. For example, emergency care at a non-network hospital or rescue helicopter facilities supplied by a non-network provider is both examples of this.

2. Stabilization Treatment Following Emergency Service

Surprise billing could also arise in non-emergency care scenarios. This could arise when patients at an in-network hospital or other facility receive care from auxiliary providers. For example, anesthetists or radiologists who are not in-network and whom patients did not actively request.

The ‘No Surprises Act’ expands the definition of emergency services. It now includes post-stabilization treatment offered in a hospital after an emergency visit. Post-stabilization service is considered urgent care. This consideration stands until a physician specifies that the patient can safely:

  • Travel to another in-network institution using non-medical transportation
  • That such a facility is available and will admit the transfer
  • That the transfer will not impose other unreasonable burdens on the patient

The “No Surprises Act” also says that health professionals before moving patients must give written notice to them of the transfer. Patients must also be in agreement with the transfer. 

3. Air Ambulance Transportation 

Air ambulance services are typically provided by non-participating healthcare providers. They use these services when patients have little to no other options of transportation.

The problem comes with balance billing. What is it exactly? Balance billing is when a healthcare provider charges a patient the excess amount of the bill.

The excess part is the part after their insurance has paid their portion. The No Surprises Act offers comparable safeguards to insured patients. This is whether they are covered by their employer-sponsored or private health plans under the same terms and conditions. 

Who Is Liable For the Rest of the Charges?

Protecting patients from surprise bills got a lot of support from both parties in Congress and from insurers and providers alike. However, passing legislation to do so had a lot of issues. The legislators tried to keep everyone happy. However, the act was criticized by the healthcare industry and questioned how medical debt collection is done.

The point of contention is about who would be responsible for the remaining balance of the debt. In the end, the law established a mechanism in which insurers and providers may negotiate the amount of compensation to be paid. If they are unable to reach an agreement, the issue may be resolved through an impartial dispute settlement process.

The law issued is now in question. It instructs arbitrators to assume that the local area’s average in-network pricing for the service is correct. They can, however, take into account other considerations such as:

  • The patient’s condition at the time
  • The doctor’s training and skill level
  • Both parties’ financial status 
  • Previous attempts to reach an agreement

Healthcare providers do not want adjudicators to place such a heavy emphasis on the average in-network price. Instead, they want to urge adjudicators to ensure a fair and meaningful process to resolve disputes.

What To Do For a Smooth Transition to a No Surprises Billing Experience!

The No Surprises Act mandates insurance companies and healthcare providers to make significant procedure changes. The new restrictions compel the medical industry to adapt considerably in a very short timeline.

Determining network status is a significant barrier for providers and contacting patients online pre-service. There will also be issues in:

  • Monitoring and submitting consent forms
  • Making Good Faith Estimates
  • Applying proper cost-sharing
  • Billing process
  • Payment reconciliations
  • The new resolving disputes method

The CMS “Overview of Rules and Fact Sheets” page contains several model forms and notices.

No Surprises, If so, Mediate!

Medical debt is a financial strain and a social driver of health. Healthcare providers and insurance companies must address it if they want to create trust with patients.

If you are not sure of the inner workings of medical debt collection laws, specifically the ‘No Surprises Act,’ please contact us. Our company will act as an extension of your practice and honor your business needs without risking customer relationships, all within the ‘No Surprises Act’!