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  • Writer's pictureMuhammad Sair Khan

How the No Surprises Act will impact your behavioral health facility


Beginning in the year 2022, there has been a lot of discussion around the No Surprises Act and how it will impact behavioral health facilities and medical practitioners. This new piece of federal legislation is over one hundred pages long. It addresses fundamental changes in the way claims are billed, expectations around reimbursement and is taking effect in every state in the U.S. The bill was enacted into law on January 1st, 2022 and is buried within two thousand pages of legal jargon. The goal of this post is to explain the No Surprises Act in an easily digestible fashion which will help you, the provider, understand its overall impact on your daily life.

The No Surprises Act was written to address surprise medical bills for patients who receive care from out-of-network medical providers or facilities. The new legislation prohibits balance billing of patients for: (1) Out-of-network emergency items and services; (2) out-of-network items and services provided at in-network facilities; (3) out-of-network air ambulance healthcare items and services. This means that patients who use out-of-network facilities will only be responsible for traditional cost-sharing amounts that would be their responsibility if care had been provided in-network i.e. deductible, copay, co-insurance.

Additionally, The No Surprises Act defers to existing state balance billing laws. There are currently thirty three states with some form of legislation regarding balance billing. California has some of the most comprehensive balance billing protections already in place. In this case, the most significant change for behavioral health facilities refers to balance billing out-of-network services that were provided at an in-network facility (for self-funded insurance plans only.) What this means is that if you are an in-network facility and provide a separately billed service using an out-of-network provider; you cannot balance bill the patient for the out-of-network service.

Existing California laws trump all other aspects of the No Surprises Act. However, it should be noted that the new legislation does not apply to in-network facilities that bill per diem for services such as detox, residential treatment, partial hospitalization, and intensive outpatient. This is because as long as the facility is in-network and the services are billed per diem, there is no differentiation between specific in/out-of-network providers since the facility as a whole is treated as the provider.

Another piece of The No Surprises Act focuses on payment negotiation for out-of-network providers who are unsatisfied with the reimbursement they receive from an insurance company. Rather th

an allowing the facility to balance bill the patient for the difference, The No Surprises Act requires that the facility negotiate directly with the payer. If the behavioral health facility is still unsatisfied, they can open an In

dependent Dispute Resolution (IDR). The goal here is to remove any “surprise” financial burden from the patient.

What Does This Mean for your behavioral health facility?


1. Within thirty days after you receive payment, you can either accept the payment or request negotiations with the payor. Expect

negotiations to last up to thirty days.

2. After thirty days of open negotiations, either party (typically the provider) has three days to initiate Independent Dispute Resolution (IDR).

The Independent Dispute Resolution (IDR) process consists of a third-party entity determining an appropriate payment offer. Five factors are used to determine the cost:

  1. Final payment offers from both parties

  2. The specific plan’s median in-network rate for the service area

  3. Any requested or submitted information

  4. Additional circumstances, such as provider experience and patient acuity

  5. Demonstrations of good faith from provider to enter into network agreements over the past four years

All five of these factors are weighted equally by the IDR entity.

It is important to note that billed charges, usual and customary rates, and Medicare/other government payor rates are not considered in the IDR entity’s determination.

At the end of this process, there is a winner and a loser. The IDR will side with one party or the other. The significance of this, aside from the payment determination, is that the “losing” party must pay the fees associated with the process for both parties.

At Datapro Billing Service, we are fully prepared to handle any expected changes in relation to the No Surprises Act. If you aren't already using our services for your medical billing needs, contact us today to see how we can help your facility or practice.

No Surprises Act - Transparency Provisions

In addition to the legislation regarding balance billing, there are also four new provisions regarding transparency – the first of which applies to balance billing while the rest apply across the board.

The first provision concerns out-of-network notice and consent. This provision states that non-emergency out-of-network providers working at in-network facilities are excluded from the No Surprises Act (thus can both bill beyond in-network rates and balance bill) if they meet the following criteria:


  1. Provide notice to patient that the provider is out-of-network

  2. Provide good faith estimate of charge (this does not mean a contract) and notice that charges may not count toward cost sharing

  3. Provide a list of in-network providers at in-network facility

  4. Written acknowledgement signed by patient that they received the above information

This does not apply to services provided when there is no in-network provider, diagnostic services, emergency medicine, anesthesiology, radiology, neonatology, or items furnished as the result of unforeseen circumstances.

The second provision is minor and states that ID cards must include deductible, out-of-pocket maximum limit, telephone number, and website for consumers. Most of this was already required and will only help encourage transparency.

The third provision requires payers to provide members with an advanced explanation of benefits for all services provided by providers and behavioral health facilities regardless of network status whenever an appointment is made. The procedure for this is as follows:

  • Member schedules an appointment

  • Provider sends payor a good faith estimate of expected charges within 1 day if the appointment is fewer than 10 days away or within 3 days if more than 10 days away

  • Payor sends member advanced EOB within 1-3 days

The advanced EOBs from the payor will include: the network status of the provider/facility, the provider’s estimate of services and billable rate, the cost sharing estimate (including the amount incurred toward deductible and out-of-pocket maximums), and generic disclaimers (e.g. the costs are based on an estimate and the final total may differ). Another important aspect is that it prohibits “gag clauses” in agreements between payers and providers that directly or indirectly restrict a health plan from disclosing provider-specific price, cost, or quality data to consumers. The exact extent of this is undefined and open to provider interpretation, allowing providers to place “reasonable restrictions” on the public disclosure of the information subject to the gag clause prohibition.

The final provision is a price/cost comparison tool which must be provided by payers to participants through an internet-based, self-service tool, by paper on request and over the telephone. This provision will not take effect until January 1, 2023 and is not relevant to providers, although it may be worth mentioning to prospective patients once the service is available so that patients may have more clarity on overall costs.


Overall Effects of the Act

The No Surprises Act does not have a large impact on the billing and collections process for most behavioral health facilities. Additionally, in California – given its current balance billing consumer protections – the act only adds new legislation for out-of-network providers rendering services at an in-network facility for self-funded plans which is relatively uncommon.

The No Surprise Act will have a direct impact on transparency provisions. The third provision regarding advanced EOBs will likely increase cost transparency with patients and could prove beneficial to behavioral health facilities. As payers roll out the new policies, we will have a better understanding of the Act and its impact on behavioral health facilities and healthcare as a whole

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