On December 27, 2020 the No Surprises Act was signed into law with the main goal of addressing the issue of surprise medical bills under health insurance plans when treatment is sought out-of-network. The majority of the legislation goes into effect on January 1st 2022, and with that date rapidly coming up we wanted to outline what this legislation means for international students and how it will impact them. There are many parts of this bill, but here is a brief summary of a few of the key items that could affect international students.
Out of Network Billing
The main crux of the act is revolving around the balance billing of patients when medical treatment is sought out-of-network. Nearly all insurance plans for international students include a provider network (also known as a PPO Network) where students can seek medical care without the need to pay upfront. In cases like these, the insurer encourages you to seek medical treatment within this network as the insurance company has pre-negotiated, fixed rates ahead of time. It is a way for insurers to control costs in the US medical system.
While students may have the option to go in-network, some students still may not. Most of these cases occur at the emergency room where the student needs immediate medical care and is not in a position to choose a hospital that is part of their network. Still others may choose an out-of-network provider based on convenience, recommendation, or availability.
When treatment is sought out-of-network, the provider can bill a much larger sum than if a patient were to seek medical treatment at an in-network provider. In other cases, students who choose to go out of network may also be responsible for additional costs such as if the plan only pays reasonable and customary expenses (leaving the insured to pay the rest) or if the plan only pays the equivalent in-network fees (again, leaving the insured to pay the remaining amount). This act of balance billing by the provider will be illegal starting on January 1st 2022.
As part of the act, PPO Networks will also be in the spotlight for attention as they will be required by law to adhere to a few key guidelines:
- Update and verify their directories every 90 days
- Have an established procedure to remove providers who they cannot verify
- Update information from providers within 2 days of receiving it
- Respond to provider status within their network within 1 business day
- Maintain a website directory with contracted providers full details
Obviously, most PPO Networks already have a website directory and procedures to keep it updated, but this law will now make it compulsory and should see smaller PPO Networks need to step up their game to keep their networks fresh and updated.
Advanced Explanation of Benefits
Insurance plans will now need to provide an advanced explanation of benefits when requested. This advanced explanation of benefits can be requested by the insured prior to any medical treatment and will show them the contracted rate for that procedure, if the provider is part of the network. When the provider is not part of the network, the advanced explanation of benefits will need to show them information on where they can find in-network providers, along with a good faith estimate from the provider and a good faith estimate of what the insurance plan will pay.
Insurance ID Cards
ID cards will now need to show:
- Any deductibles
- Out-of-pocket maximums
- Assistance phone number
- Website for assistance
Nearly all insurance ID cards already include this information already, so there will probably not be much to change here, but this law is making these items a requirement.
International Plans Exempt?
The Act applies to “health insurance plans” and it should be noted that this really means domestic insurance plans that insure US citizens and residents, for example a health insurance plan provided by an employer or individual plans offered on the exchange (healthcare.gov). Most international student plans are written on an international basis (surplus lines), and many will not consider themselves “health insurance plans” and thus there could be pieces of this bill that will not apply to them. However, that is not to say that international students will not benefit from this act – because they will. Most international plans utilize nationally recognized PPO Networks who will be complying with the act, and most providers will now make it standard practice that balance billing is not allowed and thus we will most likely see this practice stop when it comes into effect.
If you would like to dive into this in more depth, the American Medical Association has an excellent resource that goes into the finer details of the policy and please also reach out to your insurance company as they will also be able to let you know the changes they see happening from the Act.