The federal Consolidated Appropriations Act of 2021 (“CAA”), signed into law last December, contains the No Surprises Act. This is very good news for health plan participants. The law protects plan participants from surprise medical billing and provides transparency about medical providers’ fees. However, these protections don’t kick in until 2022.

Frequently, a person goes to an emergency room of a hospital that is in their health plan’s network, thinking that all they will owe is a co-pay of, say, $30-$50. Weeks later, they receive a bill for hundreds of dollars for services performed by an out-of-network ER doctor – often, an anesthesiologist – for the difference between what the person’s plan paid the doctor and her regular charges. This is called balance billing and the CAA curbs that practice.

Here are some highlights of the new surprise medical billing rules:

• Prohibits out-of-network providers from balance billing plan participants for both emergency and non-emergency services. This applies to charges for air ambulances, but not ground ambulances.

• Permits some out-of-network providers at in-network facilities to balance bill participants for non-emergency ancillary services provided the patient is given notice and consents.

• Requires group health plans to calculate an employee’s cost-sharing amount for out-of-network services based on out-of-network pricing procedures set forth in the CAA. Further, any cost sharing paid by the participant for out-of-network services must be counted toward the employees in-network deductible and maximum out of pocket amount.

• Eliminates a plan’s ability to impose restrictions on use of out-of-network services and restricts a plan’s ability to impose different cost sharing percentages on services provided by an out-of-network facility.

• Requires group health plans and insurance carriers to include deductible, out-of-pocket maximums and consumer resource contact information in any paper or electronic card issued to participants.

• Requires that group health plans and carriers provide advanced billing and personal cost information to participants based on the contracted rate the plan has established with the provider, along with good faith estimates of the participant’s share of the cost of service and a good faith estimate of the amount that the participant has already incurred toward meeting the plan out of pocket maximums.

• Requires group health plans and carriers within 30 days of receiving a bill from an out-of-network provider to either deny the claim or make an initial payment to the provider.

• Requires group health plans and carriers to negotiate with out-of-network providers if they dispute the provider’s fee. Unresolved disputes over what the plan or carrier must ultimately pay are to be resolved in “baseball style” arbitration.

• Establishes new auditing guidelines of group health plans and insurers to ensure that plans are complying with the surprise medical billing requirements set forth in the CAA.

• Requires healthcare providers to provide billing information to the group health plan or carrier that the plan or carrier will use to provide billing disclosures to plan participants.

• Consumers can receive an Advanced Explanation of Benefits before a health care service is delivered. This document must provide a good-faith estimate of costs and cost sharing and must identify whether the provider furnishing the items or services is in-network and, if not, how to find in-network providers. Insurers also will have to offer price comparison information by phone, develop a web price comparison tool, and maintain up-to-date provider directories.

A majority of states already have at least some protections against surprise billing, including New York, New Jersey, and Connecticut. For insured plans, existing state laws will apply for payment amounts and provide the mechanism for resolving surprise medical bill disputes. The No Surprises Act applies to self-insured plans, insured plans in states that don’t have a surprise billing law or if an existing state law doesn’t address an area covered by the No Surprises Act.