Billing and Collections

A closer look at the new surprise billing regulations: The impact on balance billing

July 9, 2021 1:01 am
  • New regulations on surprise billing will affect hospitals’ billing processes starting in 2022.
  • Balance billing can be used for post-emergency care and nonemergency services only if specific criteria are met.
  • The comment period for the newly released rule could affect the specific services for which balance billing will be allowed if a patient gives consent.

Hospital revenue cycle departments should get up to speed on the balance-billing restrictions that will take effect Jan. 1, 2022, in accordance with a new federal rule.

Even in various situations where balance billing will remain permissible, hospitals will have to implement additional procedures involving notice and consent unless they are in a state where such regulations already exist.

About a third of states already have comprehensive balance-billing protections, according to The Commonwealth Fund. One issue with the patchwork of regulations, according to the new rule, is that state laws don’t apply to self-insured group health plans of private employers.

In general, however, when state and federal regulations conflict, the stricter set of regulations will take precedence. For example, some states may prohibit balance billing regardless of whether patient consent is obtained as described in the new federal rule.

Post-stabilization services

Balance billing will be prohibited for emergency care across the board. If a patient receives emergency care at an out-of-network facility or from an out-of-network provider at an in-network facility, the additional cost can’t be charged to the patient but instead must be settled between the provider and health plan.

Following emergency care, balance billing will be allowed for post-stabilization services if criteria are met as described below.

Ability to travel. The attending emergency physician or treating provider must determine that the patient can travel “using nonmedical transportation or nonemergency medical transportation to an available participating provider or facility located within a reasonable travel distance, taking into consideration the individual’s medical condition,” the new rule states.

When evaluating an individual’s ability to travel to an in-network facility, physicians also must consider socioeconomic factors such as access to transportation, according to the rule.

Consent to paying for out-of-network care. If a patient is deemed fit to travel for care and still chooses to receive post-stabilization services on an out-of-network basis, the patient may be balance-billed if the provider follows the notice-and-consent procedures established in the rule.

Providers must use a standard notice document as furnished by the U.S. Department of Health and Human Services. The notice must be provided with the consent document, and those two documents may not be attached to or incorporated into any other documents.

Unlike some state regulations, the new rule does not allow providers to consent to treatment on behalf of a patient.

Notice about balance billing should be provided at least 72 hours before the date of the appointment. If the appointment is scheduled less than 72 hours in advance, notice must be provided on the day the appointment is made.

The treating physician must also determine whether patients are in a condition where they can give informed consent. The physician should consider the same principles that apply in evaluating a patient’s ability to consent to treatment, including cultural and contextual factors such as literacy or language barriers.

Another consent-related issue concerns the turnaround time from emergency care: “If post-stabilization services must be provided quickly after the emergency services are provided, it may be challenging for the individual or their authorized representative to have adequate time to make a clear-minded decision regarding consent,” the rule states. “Consent obtained through a threat of restraint or immediacy of the need for treatment is not voluntary.”

In other words, providers cannot balance-bill for post-stabilization services in such a scenario, even if consent is obtained.

Nonemergency care

If care is provided in a nonemergency situation, a provider can obtain a patient’s consent to be billed for out-of-network services in the same manner as for post-stabilization services.

However, the notice-and-consent option isn’t available with respect to the following services, for which a patient cannot be balance-billed:

  • Ancillary services for emergency medicine, anesthesiology, pathology and neonatology
  • Items and services provided by assistant surgeons, hospitalists and intensivists
  • Diagnostic services, including radiology and lab services

Based on stakeholder feedback during the upcoming comment period for the rule, HHS says it could expand the definition of ancillary services. “In particular, HHS is interested in comments on whether there are other ancillary services for which individuals are likely to have little control over the particular provider who furnishes items or services,” the rule states.

On the flip side, comments could determine whether HHS removes some advanced diagnostic lab tests from the exempt list, meaning those tests could be subject to balance billing if the patient consents.

Notice-and-consent is inapplicable when unforeseen, urgent medical needs arise during the provision of a service for which a provider obtained consent. The rule uses the example of an urgent issue that arises during knee surgery after the patient has agreed to waive balance-billing protections for items and services furnished by out-of-network providers.


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