New surprise billing regulations: Assessing a patient’s network status will be a key challenge

• With new surprise billing regulations in place, providers should ensure they have efficient processes for gauging whether a patient is in-network.
• For some providers, the task may prove to be more trouble than it’s worth in terms of opportunities to balance-bill patients.
• The new regulations make communication between providers and insurers even more important.

Heading into the Jan. 1 implementation date for new surprise billing regulations, a few issues emerged as pain points for providers trying to adjust to the new rules.

An obvious concern involved the requirement to provide good-faith price estimates to uninsured and self-pay patients ahead of scheduled services, but other challenges loomed as well.  

“Part of the administrative burden that patients had been taking on is now going to fall on providers,” said Kathryn Beard, regulatory compliance manager with R1 RCM.

Emphasis on tracking network status

The regulations protect patients from owing out-of-network payment amounts for emergency services and for care received from out-of-network clinicians who operate at in-network facilities. Patients can be balance-billed for post-stabilization services and in most nonemergency scenarios, but only if they have given formal consent before receiving care.

 That creates a greater impetus to identify a patient’s network status in advance of services.

“There’s just a while lot to unpack around billing for out-of-network scenarios and notice-and-consent,” said Heather Kawamoto, vice president of product strategy with Waystar.

Identifying out-of-network care episodes may seem simple on the surface, but Kawamoto is reminding clients that payers generally don’t pass along information on network status during eligibility inquiries. Instead, providers should go into their payer master files and highlight payer-plan combinations that are out of network.

Providers also can apply the denial codes that are issued when payers process patients as being out of network.

Said Kawamoto, “That can be a secondary check to say, ‘Where we’re seeing these out-of-network denials, are we then making sure that those are flagged on the front end so that when we register that patient, we see that they’re out of network and we can issue the necessary consents?’”

Not necessarily worth the effort

The administrative tasks may be onerous enough that some providers decide not to bother seeking consent to balance-bill patients, Beard said.

“A lot of facilities and emergency departments are deciding that the burdens associated with [billing for out-of-network services] are so significant that it might not be worth trying to do that just to balance-bill a patient who may not be willing or able to pay that balance anyway,” she said. “You’ve got to make those decisions — what makes sense for your organization?”

The regulations put more emphasis on communication between providers and insurers — even without considering the requirement to offer price estimates as part of an advance explanation of benefits for insured patients. Enforcement of that part has been tabled to give providers and insurers a better chance to set up the required technical infrastructure.

Even for other aspects of the regulations, providers should look to optimize their payer communications channels. For example, one clause limits patient cost-sharing for out-of-network care to a qualifying payment amount, defined as the insurer’s median contracted rate for a given service in a designated geographic market.

“Having to rely on the insurer to tell you what you’re allowed to bill a patient, and then making sure that you don’t bill in excess of that, can be a real challenge,” Beard said.

Potential for operational snags

The regulations require providers to incorporate an array of new and updated processes. The task would be daunting anytime and is made even more so by the continuing onslaught of the COVID-19 pandemic.

In December, Kawamoto said she was meeting with many clients on a daily basis — in some cases, more than once per day.

“There’s so much angst around it,” she said. “The good news is that they are engaging the right individuals from their organization. That’s one thing I strongly encourage folks to do — pull in their compliance department, pull in their managed care groups, just so that they’re really understanding what the potential impacts are around this.”

One key step is to conduct risk analyses around different aspects of the regulations, Beard said.

For example, departments with a high volume of scheduled services and self-pay patients should concentrate on being able to provide good-faith estimates. Emergency departments will be more focused on efficiently determining which patients are out of network, while departments with affiliated providers will need to know whether there are any insurance plans in which only the hospital participates.