No Surprises Act Compliance Scrutiny Heating Up

One provider recently found itself under the microscope over a simple ER visit.

Over the last few months, there has been plenty of buzz about the No Surprises Act, or NSA. I know that most of my clients have devoted considerable effort to ensure compliance with it. Most presume that the work was successful. But many organizations are learning the hard way an important compliance lesson: upper-level management does not always know what is happening on the front lines. The details of what happens in the billing process can create situations that may seem isolated and therefore insignificant, but in the eyes of the patient and the government, these induvial errors can be quite consequential.  

I am working with a client that has received a letter from the Centers for Medicare & Medicaid Services (CMS) alleging noncompliance with the Act. A patient presented in the emergency room and did not have any insurance information. As a result, they were billed at the hospital’s typical rates, with a discount applied because of their apparent uninsured status. I’ll save for another day further discussion about the risks of giving an automatic discount of billed charges to every single uninsured patient, and how it could call into question the accuracy of your billed charges. 

It turns out that the patient actually had insurance coverage. Upon learning this, the billing staff reversed the uninsured discount and sent a claim to the patient’s insurance company. Because the patient was seen for an emergency, under the No Surprises Act, their out-of-pocket costs should have been limited to the deductible and coinsurance under their insurance policy. Under the No Surprises Act, it is impermissible to balance-bill an insured patient when they present in the hospital with what the Emergency Medical Treatment and Labor Act (EMTALA) would define as an emergency. 

Unfortunately, two things went astray. First, the insurance company didn’t use the remark codes used to identify patient liability. Then, when the patient called to complain, the hospital’s billing staff misunderstood the NSA requirements. They believed that since the hospital was out of network, the NSA didn’t apply. If the patient hadn’t presented with an emergency, they would have been right. But the patient DID have an emergency. The NSA applied.

The organization is now being asked to provide a variety of information about their No Surprises Act compliance. While I have seen more extensive requests, seeking details about all patient complaints, information about all of their training, and more, it’s still a significant request. Upon the initial inquiries, everyone in the organization was confident they were on firm ground. But as we dug into the facts of this case, a variety of holes became visible. The main issue: ambiguities in flow sheets. Statements about good-faith estimates were applied to all patients. Statements that the NSA applied only when patients were in-network didn’t clearly explain the exception that the NSA applies to all emergency patients. 

The bottom line is that merely relying on assurances that there are processes in place to prevent balance billing is not enough. You need to do some significant pressure testing of your billing system and your staff – and make sure that they understand all the nuances of the law.