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Author: John Friedel

Late December 2020, as part of the end-of-year Federal stimulus package, Congress included and passed Federal Surprise Balance Billing Legislation, going into effect January 2022. Additional details and processes must be developed over the next several months to further support the bill. Below are the key points associated with this bill.

Curbing Surprise Balance Billing

  • The new surprise balance billing legislation goes into effect in January 2022.

  • Patients will no longer receive balance bills from out-of-network providers for amounts above their in-network rates related to emergency care and non-emergency procedures received at in-network facilities. Directly impacted will be anesthesiologists, emergency room physicians and other hospital-based providers who are often out-of-network with a multitude of payers and plans.

  • Patients shall only be responsible for any co-payments and deductibles defined by the in-network terms of their respective insurance plans.

  • The Secretary of the Department of Health and Human Services is tasked with creating a dispute resolution process to address billing for services provided to uninsured patients.

Limited Balance Billing is Allowed

  • A patient can, under certain conditions, knowingly seek care from an out-of-network provider and agree in advance of treatment to be balanced billed for the out-of-network care. However, physicians must provide a cost estimate and obtain patient consent specific to the service at least 72 hours prior to treatment. When the procedure or care is necessary for a period shorter than 72 hours, the bill allows for obtaining consent on the scheduled day of treatment.

Negotiating Fair Reimbursement

  • The bill includes a dispute resolution process. The rendering physician and respective payer will have 30 days to negotiate fair reimbursement for the out-of-network services provided. If the parties cannot agree, they will take their claim dispute to an independent arbitrator for a final decision.

  • During the arbitration, provider billed charges cannot be considered as a basis to negotiate reimbursement from a payer, as charges are considered arbitrary. Instead, the arbitrator can consider median in-network rates typically paid by payers or rates previously accepted by the provider over the previous 4-year period. A benefit to the provider is that an arbitrator cannot consider Medicare or Medicaid rates during the arbitration process. These rates are typically significantly lower than what is negotiated in-network with commercial payers; especially related to anesthesia fees.

State-Level Surprise Balance Billing Legislation

  • As of November 30, 2020, 32 states have enacted some surprise balance billing legislation; however, only 17 states have enacted legislation that is considered comprehensive.

  • Self-insured employer-based plans are not typically covered under state legislation and instead fall under Federal legislation. Therefore, plans provided by self-insured employers shall be covered under the new Federal surprise balance billing legislation.

  • The provisions provided in state-level surprise balance billing legislation shall supersede those provided in the Federal bill. Accordingly, the Federal bill defers to state legislation when there is a disparity between the two.

Once posted by the Library of Congress, the text of the final bill (H.R. 133) can be found at the following link: abeo will continue to monitor this legislation as it develops. Clients should direct any questions to their Client Relations Manager.

The above is not intended to constitute legal advice.  Clients should seek the advice of their own legal counsel with regard to any legal-related questions.


abeo Management Corporation (abeo) serves as a leading source of revenue cycle management and practice management with a specialization in anesthesia. The company leverages its people, processes, and software to serve independent practices, surgery centers, hospitals and healthcare systems with a scope of services that include billing, coding, transcription, practice management, and business consulting.

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