HHS Rule to Protect Consumers from Surprise Medical Bills

On July 1, 2021, the Biden-Harris Administration, through the U.S. Departments of Health and Human Services (HHS), Labor, and Treasury, and the Office of Personnel Management, issued “Requirements Related to Surprise Billing; Part I,” an interim final rule that will restrict excessive out of pocket costs to consumers from surprise billing and balance billing. Surprise billing happens when people unknowingly get care from providers that are outside of their health plan’s network and can happen for both emergency and non-emergency care. Balance billing, when a provider charges a patient the remainder of what their insurance does not pay, is currently prohibited in both Medicare and Medicaid. This rule will extend similar protections to Americans insured through employer-sponsored and commercial health plans.

“No patient should forgo care for fear of surprise billing,” said HHS Secretary Becerra. “Health insurance should offer patients peace of mind that they won’t be saddled with unexpected costs. The Biden-Harris Administration remains committed to ensuring transparency and affordable care, and with this rule, Americans will get the assurance of no surprises.”

Among other provisions, the July 1, 2021 interim final rule:

• Bans surprise billing for emergency services. Emergency services, regardless of where they are provided, must be treated on an in-network basis without requirements for prior authorization.
• Bans high out-of-network cost-sharing for emergency and non-emergency services. Patient cost-sharing, such as co-insurance or a deductible, cannot be higher than if such services were provided by an in-network doctor, and any coinsurance or deductible must be based on in-network provider rates.
• Bans out-of-network charges for ancillary care (like an anesthesiologist or assistant surgeon) at an in-network facility in all circumstances.
• Bans other out-of-network charges without advance notice. Health care providers and facilities must provide patients with a plain-language consumer notice explaining that patient consent is required to receive care on an out-of-network basis before that provider can bill at the higher out-of-network rate.

These provisions will provide patients with financial peace of mind while seeking emergency care as well as safeguard them from unknowingly accepting out-of-network care and subsequently incurring surprise billing expenses.

Tackling surprise billing is critically important, as it often has devastating financial consequences for individuals and their families. Two-thirds of all bankruptcies filed in the United States are tied to medical expenses. Researchers estimate that 1 of every 6 emergency room visits and inpatient hospital stays involve care from at least one out-of-network provider, resulting in surprise medical bills. And a 2019 study by the Government Accountability Office (GAO) found that the median price charged by air ambulance providers ranged from $36,400 to more than $40,000, and over 70% of these transports were furnished out-of-network, meaning most or all costs fell to the insured individual alone. Thanks to the Biden-Harris Administration and bipartisan congressional support, HHS, Labor, Treasury, and OPM are promulgating rules that will protect consumers from financial ruin simply because they could not ask for an in-network provider during their treatment.

“No one should ever be threatened with financial ruin simply for seeking needed medical care,” said U.S. Secretary of Labor Marty Walsh. “Today’s Interim Final Rule is a major step in implementing the bipartisan No Surprises Act that will protect Americans from exorbitant health costs for unknowingly receiving care from out-of-network providers.”

“Facing a difficult medical situation is challenging enough – no one should then face a surprise medical bill when they get home,” said OPM Director Kiran Ahuja. “This interim rule helps to protect Americans from financial ruin and honors federal employees, retirees, their covered family members and other enrollees who receive healthcare through the FEHB Program, the largest employer-sponsored plan, by giving them new protections from unexpected medical bills.”

The interim final rule with request for comments implements the first of several requirements passed with bipartisan support in title I (the “No Surprises Act”) of division BB of the Consolidated Appropriations Act, 2021. The regulations issued July 1, 2021 will take effect for health care providers and facilities January 1, 2022. For group health plans, health insurance issuers, and FEHB Program carriers, the provisions will take effect for plan, policy, or contract years beginning on or after January 1, 2022.

Fact sheets on this interim final rule can be found here and here.

The interim final rule with comment period can be accessed here.