Biden Administration Issues First of Three Surprise Billing Regulations

Members & Publications

August 10, 2021

On July 1, 2021, the Department of Health and Human Services (HHS) along with the Departments of Labor, Treasury, and the Office of Personnel Management issued an interim final rule banning so-called “surprise billing” for patients that unknowingly receive out-of-network health care items or services. The provisions of the rule will go into effect for providers, patients, and facilities beginning on January 1, 2022. This rule is the first of three expected regulations implementing the Consolidated Appropriations Act, 2021, which banned surprise billing in legislation in December 2020. The rule text can be found here. A consumer-focused fact sheet on the rule can be found here and a more detailed fact sheet from HHS can be found here. An in-depth memorandum from AAPM&R’s Washington counsel, the Powers Law Firm, can be found here.

What Does This Rule Do?

Under the December 2020 surprise billing legislation, patients are protected from surprise bills in most situations where they receive out-of-network care, unless they provide informed consent to receive the more expensive, out-of-network service. Surprise billing occurs when insured patients receive bills for higher amounts than anticipated after unknowingly receiving care from out-of-network providers or facilities. This can occur in both the emergency and non-emergency context.

The rule institutes protections for patients against surprise billing applicable to most situations— emergency services, non-emergency services furnished by out-of-network providers at certain in-network facilities, and air ambulance services. Individuals with insurance through group (employer) health plans, federal and state-based ACA Marketplaces, and federal employees are covered by the rule. This rule does not apply to individuals with coverage through programs such as Medicare, Medicaid, the Indian Health Service, Veterans Affairs Health Care, or TRICARE. These federal programs already protect beneficiaries against surprise billing.

The rule does allow for some limited exceptions to the ban on surprise billing. If proper notice and consent requirements are met, individuals can waive the protections to receive certain non-emergency services at the out-of-network rates without the ban on surprise billing. However, many ancillary services connected to non-emergency care, such as anesthesiology, pathology, radiology, neonatology, diagnostic services, and services provided by hospitalists and assistant surgeons may not be waived under the new law, even with the individual patient’s consent.

The rule also sets out certain procedures for determining “Qualified Payment Amounts,” which will set the basis for the consumer cost-sharing amounts to be paid in situations that would have previously resulted in a surprise bill, as well as the total amount paid by health plans to providers.

How Will This Affect Physiatrists?

Under the new regulations, all types of providers will likely become used to asking patients about their health coverage and networks prior to providing services, and facilities will be required to furnish patients with one-page notices on federal and state surprise billing restrictions. While physiatry is not likely to be a specialty dramatically impacted by the new rule, there are several situations in which a physiatrist may be directly affected by these requirements and special attention should be taken in 2022 and beyond to prevent foreseeable problems with the new law.

For instance, an inpatient rehabilitation physiatrist brought in by an acute care hospital to consult on a particular patient will likely be impacted by this rule if that physiatrist is not a member of the patient’s health plan network. If the protections are not waived, the patient would be able to receive the consultation and pay the in-network rate, while the physiatrist would have to negotiate with the health plan to receive their payment using the median contracted rate and other factors, as determined by the regulation.

Similarly, some emergency departments may have physiatrists on call as a “first responder” for patients presenting with certain symptoms, such as acute back pain. These patients would be protected from surprise bills when receiving emergency services, but the physiatrist may or may not be in-network for the patient. Hospitals may also utilize physiatrists to provide some diagnostic services, such as electromyography (EMG). In these cases, physiatrists would be paid based on an amount under an applicable All-Payer Model Agreement, an amount agreed to by the plan or issuer or, if neither applies, an amount determined by an independent dispute resolution (IDR) entity.

What’s Next for Surprise Billing?

Based on the legislative requirements, AAPM&R expects two additional regulations to be released by the Administration this year. The next rule is expected by October 1, 2021 and will establish an audit process for health plan issuers. The final rule is required no later than December 27, 2021 and will address the specifics of the IDR process that will be used to determine payments between insurers and providers for services that would have previously received a surprise bill. The Academy will continue to monitor developments regarding surprise billing and communicate to the membership how these regulations will impact physiatry.

Comments on the Interim Final Rule can be submitted through September 7, 2021. 

Legislation Introduced to Alleviate Impact of Conversion Factor Cut for 2021

Nov 09, 2020

Last month, two bills were introduced in the House proposing solutions to the estimated 10.6% Physician Fee Schedule conversion factor cut expected to go into effect January 1, 2021.  The bills offer some relief to the cut, but do not reflect a comprehensive or long-term solution.  AAPM&R has therefore chosen to remain neutral regarding these bills. 

Your Academy continues to advocate for a permanent solution to the conversion factor cut while maintaining the important payment increases to office and outpatient evaluation and management services.