Yesterday, July 1, 2021, the Biden administration took the first step to put rules into place to protect Americans from large, unexpected "surprise" medical bills. Such bills occur after patients make visits to hospital emergency rooms and receive health care services from providers that are not participating in their health plans. The rules begin the implementation of the "No Surprises Act" passed with bipartisan support in Congress and signed into law in the waning days of the Trump administration. The "No Surprises Act" was part of the Consolidated Appropriations Act, 2021 and is scheduled to take effect on Jan. 1, 2022.

The interim final rule with requests for comments (IFC) was posted by these agencies yesterday: Office of Personnel Management; Internal Revenue Service, Department of the Treasury; Employee Benefits Security Administration, Department of Labor; Centers for Medicare & Medicaid Services, Department of Health and Human Services (HHS).

Prior to the new law – except in states with surprise billing laws already in place – an out-of-network provider could bill a patient for the difference between the billed charge and the amount paid by the patient's plan or insurance. Such practices are known as “balance billing.” As HHS explained in a fact sheet accompanying the new rule, a “balance bill” may come when patients with health insurance unknowingly get medical care from a provider or facility outside their health plan’s network. Surprise billing happens in both emergency and non-emergency settings.

If a patient's health plan covers emergency services, the IFC requires those emergency services to be covered without prior authorization. This applies regardless of whether the provider is an in-network provider or an in-network emergency facility, and regardless of any other term or condition other than the exclusion of emergency services benefits.

The IFC mandates that cost-sharing for out-of-network services is set at no higher than in-network levels, and requires that such cost-sharing count toward any in-network deductibles and out-of-pocket maximums. Balance billing is prohibited. Subject to the rule are out-of-network emergency services, air ambulance services furnished by out-of-network providers, and certain non-emergency services furnished by out-of-network providers at certain in-network facilities, including hospitals and ambulatory surgical centers. Ground ambulance charges are not subject to the law passed by Congress last year.

Hospitals and physicians will be required to notify patients that they do not participate in the patient's insurance network. In post-stabilization situations and for non-emergency medical care, non-participating providers must gain patients' consent before performing and billing for those services.

The rule also sets out how the federal government will define a standard price for out-of-network care.

Finally, the IFC establishes a process by which the government can receive complaints from patients regarding perceived violations of the surprise billing rule.