Surprise billing protection is here! The promise (and a few limitations) of the No Surprises Act

The No Surprises Act -- federal legislation protecting most enrollees in most health plans from most surprise billing -- went into effect on January 1. Good news!

To review briefly, enrollees in employer-sponsored plans -- including self-funded plans -- and ACA-compliant individual market plans (as well as grandfathered pre-ACA plans)  cannot be billed more than their in-network share of costs for:

• Emergency care, including post-emergency stabilization care, at out-of-network facilities or from out-of-network providers at in-network facilities.
  
• Non-emergency care provided by out-of-network providers at in-network facilities or in support of an in-network lead provider. For example, anesthesiologists, radiologists, assistance surgeons etc. cannot balance-bill for their services provided by an in-network surgeon.
• Air ambulances -- among the most notorious balance-billers for tens of thousands of dollars. Ground ambulance charges are not protected.

The U.S. being the U.S., there are some definite and potential holes in the new protections (ground ambulance charges being the most obvious and salient). Enforcement falls to a tangle of federal and state agencies, depending in part on whether the health plan is self-funded and whether the state in which a violation occurs proves to "substantially enforce" the law (if not, HHS is a fallback). The Kaiser Family Foundation maps out that potential maze. On the plus side, CMS has stood up an online consumer complaint form on its info page about the new protections.

A couple of other potential weak points:

1. Tiered networks: In a tiered network, emergency care billed at an "in-network rate" may be problematic. As I noted once with regard to Independence Blue Cross individual market plans offered in Philadelphia and surrounding areas, per the plan summary: 

For Keystone HMO Proactive plans, if you are admitted to an in-network hospital from the emergency room, the out-of-pocket costs for inpatient hospital will apply based on the tier of the in-network hospital. If admitted to an out-of-network hospital following an emergency room admission, the Tier 3 in-network level of benefits will apply. Out-of-network providers for emergency services will be covered at the Tier 3 level of benefits. 

On the plus side, out-of-pocket costs for emergency care in these plans are the same across tiers, and an Independence agent told me that the emergency fee covers "anything that happens in the emergency room" -- including, in the case of a broken arm, x-rays and surgery. For hospital admission, however, the costs are dramatically different across tiers. Then again, the No Surprises Act protections apply to emergency care and post-emergency stabilization; if further care is needed, the patient will need to be moved to an in-network facility to avoid out-of-network charges. The same principle presumably applies to the tiers in the Independence plans.

More broadly, a spot check in three markets in the ACA marketplace suggests that differences in out-of-pocket costs in network tiers most commonly apply to physician services, not to hospital services. Getting slammed by upper-tier costs for emergency care may not be a widespread problem. In the plans I looked at, the services in which tiers made a difference were quite limited. Then again, my spot check doth not research make. In the world of employer insurance, 31% of plans offered by employers with 5,000 or more employees had tiered networks in 2019, according to KFF.

I suppose, too, that in non-emergency care, a surgeon or other lead provider may be in Tier 1, while ancillary providers (anesthesiologist, etc.) may be in other tiers. 

2. Short-term limited duration (STLD) plans.  These lightly regulated, medically underwritten, ACA-noncompliant plans, furiously promoted and granted regulatory easement by the Trump administration, are "buyer beware" on all fronts. The NSA protections do not apply to them, as this Commonwealth Fund brief explains:

The No Surprises Act applies to participants, beneficiaries and enrollees in group health plans and group and individual health insurance coverage offered by health insurance issuers. The law also applies to grandfathered health plans (as defined in section 1251(a) of the Affordable Care Act).

By definition in underlying law, “individual health insurance coverage” does not include short-term, limited-duration plans. 

2. Self-funded student health plans (in colleges and universities). The No Surprises Act protections do apply to self-funded employer-sponsored health plans, which cover about two thirds of all people covered by employer-sponsored plan. In fact, a major impetus to federal surprise billing legislation is the fact that self-funded employer plans are not subject to state regulation, including state surprise billing protections. Self-funded student health plans, however, which as of 2021 provided some level of coverage to about 200,000 college students (out of about 18 million), like STLD plans, are technically neither group health plans nor individual health plans and are not subject to regulation by HHS. 

About 40 self-funded university and college health plans have applied for and obtained certification as Minimum Essential Coverage under the ACA, which means they "must meet substantially all the requirements of title I of the Affordable Care Act pertaining to non-grandfathered, individual health insurance coverage." The application for MEC certification asks whether the plan provides core ACA features such as Essential Health Benefits and annual limits to enrollees' out-of-pocket costs, but there is some wiggle room: plans don't have to answer yes to all such questions to obtain certification. More to the point here, self-funded student plans are not subject to the protections against balance billing provided by the No Surprises Act, though they may be subject to state balance billing protections. Fully insured student plans (i.e., those that are not self-funded) are subject to the NSA.

I may have more to say about self-funded student plans in a future post.

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