Shawn Stack: No Surprises Act is important move toward meaningful consumer transparency
Patients will clearly benefit immediately from the No Surprises Act, which became effective on Jan. 1. But the larger impact of the act will unfold gradually over months and even years, as we await the release of provisions targeting health plans and payers.
The No Surprises Act takes much-anticipated steps to protect insured patients from receiving surprise medical bills resulting from unknown gaps in their in-network coverage. Patients were vulnerable to receiving such bills when they sought emergency care, air ambulance services or certain other services at in-network facilities that, without their knowledge, were using out-of-network clinicians to provide some of their care.
The act implements provisions requiring providers and health plans to hold patients liable only for their in-network cost-sharing amount.
The act also gives providers and insurers a more structured approach — called the independent dispute resolution (IDR) process — to negotiate payment for medically necessary items and services in instances the providers require out-of-network help to be able to deliver those items or services. The IDR process is intended to help the payers and providers resolve the payment issues when they are unable to come to an agreement on their own.
The insured provisions are set to be implemented in a staggered fashion, to account for differing levels of provider-payer readiness across the nation. But their ultimate objective is to ensure both providers and health plans consistently provide patients with access to accurate healthcare cost information upfront, thereby eliminating any possibility that they might experience the unexpected financial stresses of a surprise bill.
Cost transparency provisions
A second set of provisions of the act, also effective Jan. 1, aims to improve cost transparency for uninsured and self-pay patients seeking scheduled medical care at facilities and providers. These provisions are intended to protect these patients from bills that exceed any good faith estimate of charges for medical items and/or services that was performed for them prior to their receiving medical care. Specifically, if the charges exceed the good faith estimate by more than $400, the patients can pursue a formal patient-provider dispute resolution process to contest the discrepancy.
In many cases, additional charges in excess of the original good faith estimate may be acceptable due to medical complications that were not known prior to the service. But the protections afforded by the No Surprise Act will be reassuring to patients as they contemplate pursuing medical care they need to lead healthier lives.
What’s next? It will be the payers’ turn
It’s often said that no good deed goes unpunished, and one could argue that’s the case for payers that were strongly advocating for legislation to end surprise billing. So far, providers and their facilities have been the sole focus of the act’s Jan. 1 provisions against balance billing and exceeded good faith estimates.
But the No Surprises Act is a complex piece of legislation, with many caveats and intricacies, and payers will not be immune from its effects. The reality is that health plans and payers bear just as much responsibility as providers in balance billing and transferring surprise out-of-pocket expenses to patients. Health plans and payers have many tactics for transferring costs of care to patients and community providers, even as they are maintaining per-member-per-month payment from employers paying them to help keep their workforce healthy. These tactics include:
- Complex and vague medical-necessity criteria
- Out-of-date network directories
- Ever-changing prior authorization requirements
- Opaque and confusing technical and medical policies
Forthcoming provisions for health plans and payers, delayed until mid-year 2022 and 2023, should assist in protecting patients, employers and providers from such tactics that lead to surprise denials and cost transfers for care.
Health plans and payers will soon be required to:
- Keep updated network directories
- Clearly display cost sharing and benefit details on insurance cards
- Comply with continuum-of-care requirements
- Provide good faith estimates and advanced explanation of benefits to community providers and patients that detail coverage, cost-sharing amounts and technical and medical policy requirements
A legal challenge
One area of the No Surprises Act provisions originally set to go into effect on Jan. 1 is currently on hold because it is being contested in court. CMS’s weighted recognition of a health plan’s internally set qualified payment amount (QPA), used to determine the initial payment to a provider for out-of-network medical care, has been seen by many legal and medical experts as an attempt to dictate privately negotiated payment rates.
The American Hospital Association (AHA), the American Medical Association (AMA) and, separately, the Texas Medical Association (TMA) have filed lawsuits against CMS arguing that the agency’s arbitration guidance heavily sides with health plans and payers in its weighted support of the QPA and does not consider a number of items such as complex medical scenarios, quality, wage index factors, provider types and extraneous medical scenarios. HFMA policy geeks like myself and others in the industry feel confident that the AHA/AMA and the TMA will prevail and get the misdirected guidance corrected soon.
What we have accomplished — and what it means
The No Surprises Act is a much-anticipated and much-needed legislated solution to a very real problem that has clearly affected many people across the nation. I’ve been around healthcare long enough to know that the majority of health plans, hospitals and other providers and most policy folks have their patients and communities at heart, and they support the goals of the legislation.
This view has been reinforced by the COVID-19 public health emergency (PHE), in which all these players have come together tirelessly and with a deep commitment to helping the nation respond to an unprecedented crisis. If ever there was a doubt, the PHE — just like all that work that was done to lay the groundwork for the No Surprises Act — reminds us of the importance of these players in our lives. The passage of the act is a small step in the right direction!