Oct. 27, 2021 – Consolidated Appropriations Act (CAA) Update
This article provides general information and is not legal advice. If you have specific questions about compliance with the Consolidated Appropriations Act or the Affordable Care Act, please contact your legal counsel.
The Consolidated Appropriations Act of 2021 (CAA) includes new requirements to protect members against balance billing, typically in situations that are beyond their control. These new requirements apply to group health plans (groups) and health insurance issuers (issuers) that offer group or individual health insurance coverage. Both grandfathered and non-grandfathered plans must comply with these provisions, as well as insured and self-funded groups.
This article provides a high-level, general summary of the CAA’s surprise billing provisions based on what we know today. Information may change as we gain more clarity around the law and as regulations and guidance are issued by federal agencies responsible for implementing the provisions. We plan to publish future articles with more details, including our approach to implementation.
What is Surprise Billing?
When a member receives covered services from out-of-network (OON) providers today, member cost-sharing and provider payments are based on an allowed amount determined by BlueCross. The OON provider can bill the member for the difference between this allowed amount and the provider’s total charges. This is called balance billing.
In some situations, a member’s use of OON providers is beyond the member’s control. For example, a member may receive emergency services at an OON facility. Or a member may receive non-emergency services at an in-network facility, but some of the providers, unbeknownst to the member, may be OON. This typically occurs with providers the member doesn’t choose – like an anesthesiologist, radiologist, or pathologist. Balance bills received in these scenarios are called surprise bills.
Surprise Billing Provisions
The CAA addresses three surprise billing situations:
- Emergency services received at an OON emergency department of a hospital or an independent freestanding emergency department
- Non-emergency services received from an OON provider at an in-network facility unless the member receives notice of, and provides consent to, treatment by the OON provider and balance billing
- OON air ambulance if the services would have been covered if provided by an in-network air ambulance provider
The CAA’s surprise billing protections aim to take the member out of the middle. In surprise billing situations, issuers and groups will be required to determine member cost-sharing based on a calculated median in-network rate, called the qualifying payment amount (QPA).1 In-network benefits, including deductible and out-of-pocket amounts, will also apply. OON providers and facilities can bill the member for the cost-sharing amount, but they can’t balance bill the member. If the provider can’t reach an agreement with the issuer or group on the payment amount for the services, they may initiate arbitration. This is called independent dispute resolution (IDR).
Notice and Consent
Sometimes members choose to receive non-emergency services from an OON provider when using an in-network facility. Perhaps a member wants to use a specific OON surgeon for a procedure or wants a certain OON doctor for cancer treatment. In these cases, the OON provider can notify the member that they are OON and provide additional information about the cost of services as required by law. The member can then consent to the treatment from that OON provider. If the member provides consent, the member will receive OON benefits for the services and the provider may balance bill the member.
The law excludes some items and services from the notice and consent process, such as certain ancillary services including anesthesiology, pathology, and radiology. OON providers furnishing these services can’t provide notice of their OON status or seek consent to balance bill members in connection with these services. Balance billing is also not allowed in situations where unexpected, urgent medical needs arise, even if notice and consent was obtained for the initial services.
The CAA requires surprise billing protections to be implemented at the start of the plan or policy year beginning on or after Jan. 1, 2022. We feel these changes provide significant protections to members and plan to implement changes on January 1 to the extent possible.
- For individual market policies, surprise billing protections will be effective Jan. 1, 2022.
- For fully-insured and level-funded groups, we plan to implement the protections on Jan. 1, 2022 regardless of the renewal date. Groups with renewal dates other than January will receive more information and details soon.
- For self-funded groups, account executives have reached out to groups with renewal dates other than January asking for their decision about implementing on January 1 or at renewal. If you haven’t heard from your account executive about your options, please contact them immediately.
We’re Here to Help
Please contact your BlueCross sales or account executive with questions.