The No Surprises Act was passed as part of a larger Covid relief package in December 2020. The regulations underpinning the act were created by the Centers for Medicare and Medicaid Services (CMS) and went into effect on January 1 2022 The No Surprises Act, as the name suggests, has one main goal: to reduce surprise bills after medical or surgical services.
The law seeks to avoid surprise bills in three scenarios:
1. Emergency care from an out-of-network provider at an in-network facility
Let’s say you are taken to the hospital by ambulance after a bicycle accident. You get x-rays that show a broken arm. The ER doctor puts you in a splint and you go home to be seen by an orthopedic surgeon.
Weeks later, you get bills for the hospital, the ER doctor, and the bill for the x-ray, the radiologist reading the x-ray, and the ambulance ride. Your insurance covers the hospital, emergency room, and X-ray bills because they are in your coverage network. However, the radiologist and ambulance bill seems surprisingly high and not covered by your insurance. That’s because in this scenario, these services are outside of your network of coverage, and if you don’t have out-of-network (OON) benefits in your insurance plan, then (surprise!) you have to pay the full cost out of pocket.
Even if the patient has OON benefits, their cost sharing ie. the amount liable would be higher for OON services. So, for example, instead of a $1,500 deductible, $8,000 out-of-pocket maximum, and 40 percent coinsurance for in-network services, your OON cost-sharing could be as high as $3,000, $16,000, and 50 percent, respectively, depending on your insurance plan.
With the implementation of the No Surprises Act (NSA), out-of-network providers are no longer allowed to send out-of-network bills to patients in emergency situations like the example above. Instead, providers are reimbursed the qualified payment amount, or QPA, which is based on several variables, including the complexity of the case, whether the service is provided at an educational institution and the average network rate. These network payment limits continue to be a source of current legal action.
As an aside, the ambulance trip taken in the scenario above, which was also considered OON, would still be paid at the OON rate. The ground ambulances were excluded from the No Surprises Act ostensibly because of the complexity of the bureaucracy surrounding ambulances, which are sometimes owned by a city or county. In other words, the government has passed a bill that excludes a government organization from its own regulations. Therefore, in addition to receiving higher OON rates, county or city owned ground ambulances will also continue to receive tax revenue! Unlike ground ambulances, air ambulances, which are usually private, were included in the NSA.
2. Non-emergency care from an out-of-network provider
The other type of OON bill that was prohibited in the law relates to receiving non-emergency care from an out-of-network provider to an in-network facility. An example would be a woman who gives birth at an in-network hospital, has her baby delivered by an in-network OB-GYN, but receives an epidural from an OON anesthesiologist. With the implementation of the NSA, the anesthesiologist will now be billed at the lower in-network rate.
There are exceptions to the OON billing limits. In the case of a plastic surgeon performing breast reconstruction or an orthopedic surgeon performing knee replacement surgery in a non-emergency setting as an out-of-network provider, the surgeon may still bill at the OON rate if 1.) obtains express consent from the patient to charge the higher OON rate and 2.) provide an estimate of the OON costs the patient should expect. An example of a consent and assessment to be signed by the patient can be found at NoSurprisesAct.com.
Future regulations will require the provider to submit estimated costs to the insurance carrier, who will then combine the surgeon’s fee with the hospital’s, anesthesiologist’s, and any other reasonably anticipated charges in an Expanded Explanation of Benefits (AEOB) to be given to the patient preliminary to the procedure. The implementation of these AEOB total costs of care is delayed until the technology processes are developed.
So for now, the OON provider in a non-emergency situation is only required to give an estimate of their own services, not all of the providers’ associated costs, to the patient.
3. Care when the patient is uninsured or pays for services out of pocket without insurance
For patients who are uninsured or do not use their insurance and choose to pay out of pocket, providers are required to give the patient an estimate of all reasonably expected costs ahead of time, called a Good Faith Estimate (GFE). This is different from the AEOB described above as insurance is not included.
The GFE should have various CMS-mandated elements included in it. In addition to basic demographic information and any expected costs for the planned services to be provided (physician fee, anesthesia fee, operating room fee, co-pays), the assessment should have ICD-10 codes (eg, Z41.1– Cosmetic Surgery Encounter), CPT codes (leave blank if there is no corresponding CPT code for a procedure), NPI and EIN numbers, and CMS-specific words that explain the dispute resolution process if their actual costs differ from estimated costs by more from $400. An example of a good faith assessment can also be found at NoSurprisesAct.com.
GFE also introduced the concept of the convening provider. Anyone who the patient requests GFE is considered by law to be a referring provider. This means that the surgical center, the anesthesiologist, or the surgeon could theoretically be the organizer, depending on which patient originally requested the evaluation. But in practice, the surgeon who assesses the patient and recommends a procedure will naturally be the aggregating provider and is required to collect all reasonably expected costs from the various associated providers and present them to the patient in the form of a GFE. While the law on the responsibilities of the convening organizer was due to come into force in 2023, it is postponed for now.
However, in the case of any cash-based surgical provider, including aesthetic providers, operating room and anesthesia fees are generally time-based, and the surgeon has access to these fee schedules. So even if implementation of the provider recall provisions is delayed, it is still possible for the provider to implement it now, resulting in increased patient satisfaction.
Are aesthetic services really included in the No Surprises Act?
Although there is no evidence that aesthetics were on the radar of Congress or the Centers for Medicare and Medicaid Services (CMS) when drafting or writing the regulations related to the No Surprises Act, they appear to be included now.
in this official guide from the Centers for Medicare and Medicaid Services (CMS), a good faith appraisal is required for all uninsured (or self-pay) individuals. The phrase “uninsured (or self-pay)” is used 103 times in the document. The term cosmetic or aesthetic is never used.
However, a liberal reading of the regulation suggests that “self-pay” refers to the uninsured, those who decline insurance, and patients who pay out-of-pocket for services not covered by insurance, as in the case of cosmetic procedures. In other words, “self-pay” is the same as “paying yourself.” An analogous combination of phrases would be to assume that “ride sharing” is equivalent to “ride sharing”, which is not the case.
In the jargon of medical billing, self-pay refers to those without insurance or choosing not to use insurance. Patients are not choosing not to use insurance for cosmetic services. Cosmetics are categorically excluded from health insurance policies. But by the letter of the law, cosmetic services are currently included in “self-pay” under CMS regulations.
While CMS may clarify the aesthetics issue in the future, there are a few requirements that seem clear and applicable to everyone. These include posting notices at the front desk and on the home page of the practice’s website alerting the patient to their protection against surprise bills and on right to request and receive a good faith appraisal
When is a good faith appraisal necessary?
In summary, upon request and no later than 3 days prior to the procedure, a good faith evaluation must be provided, with all necessary wording and elements required by CMS, under two primary circumstances:
- Multiple providers (and multiple charges) are used for a procedure, e.g. surgeon, surgical center and anesthetist
- Multiple treatment sessions required (laser hair removal, consultation, subscriptions, memberships)
With each update, CMS provides guidance on various aspects of GFE and when it is needed. Most cases are obvious based on these updates. However, since aesthetics are never specifically mentioned in any updates (nor in the original law or regulations), we are forced to extrapolate how the law applies to the self-paying aesthetic space.
For example, should you give someone a good faith evaluation for a neurotoxin (Botox) visit? Ann update from CMS on April 6 offers insight. When it comes to on-site, same-day lab service, no GFE is required. Logically, a neurotoxin or filler appointment is also appropriate no require GFE.
The update goes on to clarify that all scheduled repeat treatments, such as physiotherapy or counseling sessions, require a GFE – one GFE to cover all sessions in a year, not one GFE for each session. This implies that a GFE will be required for any membership/subscription offered by an esthetics provider or, for example, scheduled laser hair removal sessions.
The ultimate goal of NSA and other Trump-era price transparency rules it’s clean. The goal is to remove the veil of price opacity from the healthcare sector and treat it like any other segment of the economy so that consumers know their personal financial responsibility before receiving any good, service or treatment .
Make no mistake, these rules are here to stay. Providers should view the No Surprises Act as an opportunity, not a burden. Compliance helps avoid a $10,000 fine per violation and has the added benefit of earning patient trust and loyalty as a transparently priced provider.
Photo: Andrey Popov, Getty Images