The federal No Surprises Act (NSA) became effective January 1, 2022. The law is designed to protect patients from unexpected medical bills arising from emergency and most non-emergency services administered by out-of-network providers in certain settings, and it prohibits providers from balance billing patients under these circumstances. It also protects patients from paying more than their in-network level of cost-sharing, for services rendered subject to the NSA, specifically covered patients’ co-pay, deductible and co-insurance amounts.
While the NSA has received widespread reporting regarding patient balance billing protections, the Act also has a far-reaching impact to other revenue cycle management processes that have garnered minimal attention until recently.
No Surprises Act Guidance for Debt Collectors
Last month the Consumer Financial Protection Bureau (CFPB) issued a compliance bulletin and policy guidance reiterating to medical debt collectors and credit bureaus their legal obligations in connection with the NSA. It advises, companies that:
- collect on medical bills that are prohibited by the NSA,
- furnish information to credit bureaus about such invalid debts, or
- report charges that exceed the amounts permitted under the NSA,
may face significant legal liability under the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA).
CFPB offers a case example, “a debt collector who represents that a consumer owes a debt arising from out-of-network charges for emergency services may violate the prohibition on misrepresentations if those charges exceed the amount permitted by the NSA.” Examples can include seeking collection of out-of-network cost-sharing amounts where the NSA limits the patient obligation to in-network cost-sharing only.
Furthermore, many debt collectors provide information about consumers’ unpaid medical bills to consumer reporting agencies (CRAs). CRAs, under the FCRA, are liable for the accuracy of any consumer information reports they furnish and are obligated, in the event of a consumer dispute, to conduct a reasonable and timely investigation to verify the information. The Bureau indicates that it will “closely review the practices of those engaged in the collection or reporting of medical debt” and hold those entities accountable for compliance.
Potential Risks of Balance Billing for Out-Of-Network Providers
Out-of-network providers must consider, along with a number of new practice management procedures, the potential risks associated with balance billing patients, particularly under the new regulations. NSA violations made during the initial claim submission, negotiations and even the IDR process will be sorted out within the existing framework for handling out-of-network claims.
Conversely, CFPB’s oversight and enforcement of the FDCPA and the FCRA suggest violations related to NSA, require providers to carefully monitor “debt” that is being forwarded to collection agencies to avoid violations of the FDCPA and FCRA. We are advising our clients to evaluate and adjust their practices’ patient collections policies to ensure compliance under the CFPB guidance.