The No Surprises Act, passed as part of the COVID-19 relief package, ensures patients do not receive surprise bills after out-of-network care, including hospital-based physicians such as pathologists

Consumer demand for price transparency in healthcare has been gaining support in Congress after several high-profile cases involving surprise medical billing received widespread reporting. Dark Daily covered many of these cases over the years.

In “Are Clinical Laboratories Prepared to Cope with Outrage Over Surprise Medical Billing? Patient Access Management May Be an Effective Solution,” we reported on how some early-adopter medical labs and pathology groups were using Patient Access Management (PAM) platforms to address new federal transparency policies, change patient expectations about billing, and increase revenue by lowering denial rates.

And in “Balance Billing Under Increased Scrutiny at Both State and Federal Levels: Clinical Laboratory Tests Top List of Surprise Bills Received by Patients,” we reported on how clinical laboratory testing topped the list of the surprise bills received by patients, according to a survey conducted by the National Opinion Research Center (NORC) at the University of Chicago.

Now, after initial opposition and months of legislative wrangling, organizations representing medical laboratories and clinical pathologists have expressed support for new federal legislation that aims to protect patients from surprise medical bills, including for clinical pathology and anatomic pathology services.

The new law Congress passed is known as the No Surprises Act (H.R.3630) and is part of the $900 billion COVID relief and government funding package signed by President Trump on December 27.

“While this legislation is not perfect (no law is), it serves as a compromise where patients ultimately win,” stated the American Society for Clinical Pathology (ASCP) in its ePolicy News publication.

The law addresses the practice of “balance billing,” in which patients receive surprise bills for out-of-network medical services even when they use in-network providers. An ASCP policy statement noted that “a patient (consumer) may receive a bill for an episode of care or service they believed to be in-network and therefore covered by their insurance, but was in fact out-of-network.” This, according to the ASCP, “occurs most often in emergency situations, but specialties like pathology, radiology, and anesthesiology are affected as well.”

Most portions of the No Surprises Act take effect on January 1, 2022. The law prohibits balance billing for emergency care, air ambulance transport, or, in most cases, non-emergency care from in-network providers. Instead, if a patient unknowingly receives services from an out-of-network provider, they are liable only for co-pays and deductibles they would have paid for in-network care.

New Law Bars Pathologists from Balance Billing without Advance Patient Consent

The law permits balance billing under some circumstances, but only if the patient gives advance consent. And some specialties, including pathologists, are barred entirely from balance billing.

The law also establishes a process for determining how healthcare providers are reimbursed when a patient receives out-of-network care. The specifics of that process proved to be a major sticking point for providers. In states that have their own surprise-billing protections, payment will generally be determined by state law. Otherwise, payers and providers have 30 days to negotiate payment. If they can’t agree, payment is determined by an arbiter as part of an independent dispute resolution (IDR) process.

Early Proposal Drew Opposition

An early proposal to prohibit surprise billing drew opposition from a wide range of medical societies, including the ASCP, CAP, and the American Medical Association (AMA).

All were signatories to a July 29, 2020, letter sent to leaders of the US Senate and House of Representatives urging them to hold off from enacting surprise billing protections as part of COVID relief legislation. Though the groups agreed in principle with the need to protect patients from surprise billing, they contended that the proposed legislation leaned too heavily in favor of insurers, an ASCP news release noted.

“Legislative proposals that would dictate a set payment rate for unanticipated out-of-network care are neither market-based nor equitable, and do not account for the myriad inputs that factor into payment negotiations between insurers and providers,” the letter stated. “These proposals will only incentivize insurers to further narrow their provider networks and would also result in a massive financial windfall for insurers. As such, we oppose the setting of a payment rate in statute and are particularly concerned by proposals that would undermine hospitals and front-line caregivers during the COVID-19 pandemic.”

Hospital groups, including the American Hospital Association (AHA), raised similar concerns in a July 30 letter to congressional leaders.

On December 11, leaders of key House and Senate committees announced agreement on a bipartisan draft of the bill that appeared to address these concerns, including establishment of the arbitration process for resolving payment disputes.

However, in a letter sent to the committee chairs and ranking members, the AHA asked for changes in the dispute-resolution provisions, including a prohibition on considering Medicare or Medicaid rates during arbitration. “We are concerned that the IDR process may be skewed if the arbiter is able to consider public payer reimbursement rates, which are well known to be below the cost of providing care,” the association stated. However, legislators agreed to the change after last-minute negotiations.

AHA President and CEO Rick Pollack headshot in suit and tie
“The AHA is pleased that Congress rejected approaches that would impose arbitrary rates on providers, which could have significant consequences far beyond the scope of surprise medical bills and impact access to hospital care,” AHA President and CEO Rick Pollack (above) said in a statement. “We also applaud Congress for rejecting attempts to base rates on public payers.” (Photo copyright: American Hospital Association.)

Dispute Resolution for Pathologists

The CAP also expressed support for the final bill. In a statement, CAP noted that “As the legislation evolved during the 116th Congress, CAP members met with their federal lawmakers to discuss the CAP’s policy priorities.

“Through the CAP’s engagement and collaboration with other physician associations, the legislation improved drastically,” the CAP stated. “Specifically, the CAP lobbied Congress to hold patients harmless, establish a fair reimbursement formula for services provided, deny insurers the ability to dictate payment, create an independent dispute resolution (IDR) process that pathologists can participate in, and require network adequacy standards for health insurers.”

As laboratory testing was identified by thousands of respondents to the University of Chicago survey as the top surprise bill, it is likely that billing and transparency in charges for clinical pathologist and anatomic pathologist will continue to be scrutinized by law makers and healthcare associations.

—Stephen Beale

Related Information:

Detailed Summary of No Surprises Act

H.R.3630 – No Surprises Act

Are Clinical Laboratories Prepared to Cope with Outrage Over Surprise Medical Billing? Patient Access Management May Be an Effective Solution

Balance Billing Under Increased Scrutiny at Both State and Federal Levels; Clinical Laboratory Tests Top List of Surprise Bills Received by Patients

The No Surprises Act: Implications for States

AHA Statement on COVID Relief Package and Government Funding Bill

AHA Letter on No Surprises Act

How the CAP Shaped Surprise Billing Legislation with its Advocacy

Success on Surprise Medical Bills

Congress Curbs Surprise Billing in Omnibus Coronavirus Relief Bill

ASCP Joins AMA on Surprise Billing Letter

ASCP Continues Patient Advocacy Efforts on Surprise Billing Legislation

Surprise Medical Bills Cost Americans Millions. Congress Finally Banned Most of Them