More than a year ago, the U.S. healthcare system marked a turning point with the passage of the No Surprises Act (NSA). Signed into federal law after extensive negotiation between health plan insurers and providers, the NSA took full effect at the start of 2022 to protect the rights of patients and health plan participants from receiving excessive balance bills for certain emergency services and from out-of-network providers at in-network facilities.
Bipartisan legislative support of the NSA was a rare victory that increased plan benefits while lowering participant-paid out of pocket costs, but challenges still remain. While there was widespread enthusiasm and expectations of relief from surprise balance billing, the NSA has become bogged down in litigation, and extensive arbitration challenges. Concurrently, many health plans are seeing medical costs increase, compounded by a surge in inflation – triggering increases in participant point of purchase cost sharing (deductibles, copayments) and/or an increase in all covered employee contributions.
NSA Provisions for Medical Devices
While the primary focus of the NSA is on protecting patients from unexpected bills, it also includes provisions related to medical devices. Specifically, the act addresses situations where patients receive medical devices as part of their medical treatment, and these devices may be provided by out-of-network providers. It’s important to note that the NSA primarily focuses on patient protection from unexpected medical bills and does not directly regulate the medical device industry. Instead, it addresses the financial aspects of receiving medical services, including devices, from out-of-network providers in certain situations.
A Compliant and Strategic Solution for Health Plans
While plan sponsors have amended their health plans to comply with the NSA, many took a “compliance only” approach and failed to reconsider their coverage strategy. The best response to the NSA is both strategic and compliance oriented. Plan sponsors can still take strategic action in light of NSA requirements and Transparency in Coverage final rules in order to gain a competitive financial advantage.
Price Transparency Tools
A quality health plan should provide easy access and a clear understanding of provider pricing via an Advanced Explanation of Benefits in order for participants to make informed and cost-effective care decisions. Price transparency has the capability to put these participants in the driver’s seat as healthcare consumers.
Advance Transparency in Coverage (TiC) rules require employers to provide employees with easy access to an online shopping tool featuring 500 shoppable services and highlighting personalized out-of-pocket cost information for covered healthcare items and services. Thousands of provider negotiated rates datasets have emerged following the TiC rule taking effect, sparking a paradigm shift.
Given compliance deadlines and market demands, a number of innovative startups have introduced a number of price transparency tools. Their powerful data-driven software and online data analytic solutions provide a degree of price transparency and insights by harnessing price data electronically and on-demand through a computer or mobile device.
Here are examples of health service price transparency tools:
- Online Price Comparison: These web-based applications allow users to search and compare the prices of various medical procedures, treatments and services across different healthcare providers, such as hospitals, clinics, and doctors’ offices. Users can typically filter results based on their location, insurance coverage and specific procedure.
- Insurance Company: Some health insurance companies offer online tools or mobile apps that help their members estimate the out-of-pocket costs for specific healthcare services based on their insurance plan and network.
- Quality and Patient Experience Data: Some price transparency tools also include data on the quality of care provided by different healthcare facilities and patient reviews and ratings, helping patients make more comprehensive decisions.
- Patient Cost Estimators: These tools provide estimates of a patient’s out-of-pocket costs for specific medical procedures or treatments, taking into account their insurance coverage and deductible.
While the purpose of these tools is to empower users to make more informed choices about their healthcare by considering both the cost and quality of services, even with greater transparency, significant price variations can still exist across hospitals and providers for the same standard procedures.
Reference-based Pricing (RBP) Plan
More health plans are adopting reference-based pricing (RBP) strategies. to avoid unreasonable or excessive provider charges – potentially lowering the cost of coverage and employee point of purchase cost sharing.
Designed to moderate excessive hospital costs, RBP establishes a benchmark fee schedule and payment ceiling instead of negotiated fees by contracting with a provider network. Plan sponsors and participants benefit from the consistent application across all providers and health networks.
RBP often uses Medicare pricing multiples as a pricing benchmark to establish reasonable payments to providers. Broadly, this creates a ceiling for payments and facilitates transparency. Because the NSA has no bearing on initial payments to the provider, existing cost management strategies such as RBP are still valid under the new provisions.
An effective way for employer-sponsored health plans to avoid most of the requirements and challenges of the NSA and the Independent Dispute Resolution process is to adopt a “pure” RBP plan coupled with tech-driven data support. Where plans do not contract with providers, they should remain unaffected by NSA because there aren’t any in-network nor out-of-network claims; nor is there any determination of a median in-network rate. There is no Qualified Payment Amount (QPA) – a NSA required reimbursement rate that for in network services which is usually substantially higher than the RBP maximum covered charge.
“Advanced” Explanation of Benefits
The Advanced EOB requirement, part of the NSA transparency rule, is designed to give advance notice to participants of how a claim for future, scheduled medical services might be processed – and, most importantly, what the plan expects to pay and how much the participant will pay out of pocket for a particular test or procedure.
The NSA requires health plans and insurers to provide an Advanced EOB when requested in advance of receiving medical services. The requirement applies whether these non-emergency scheduled medical services are to be delivered in or out-of-network. The Advanced EOB must be issued within certain timeframes after the provider submits to the plan or insurer a Good Faith Estimate of charges for each service.
The Advanced EOB is the only document that would give a participant sufficient information to make an informed decision on pending treatment. Plan sponsors should prompt their claims administrators to add an Advanced EOB now, before regulatory guidance is issued, to gain an additional advantage.
Value of a Medical Billing Partner
Fully optimizing participant engagement and plan value requires a holistic approach to plan design. Compliance with NSA requirements offers plan sponsors an opportunity to make strategic changes that will support the ’health and wealth’ of participants.
Plan sponsors are benefiting from medical billing partnerships that provide them with insight and data-driven solutions. This type of support has not always been readily available to the self-insured community – which now includes 65% or more of health plan participants among US companies of all sizes.
The right medical billing partner acts as an agent of change to facilitate strategic design and administrative processes. They also provide value-added services through turnkey solutions, administrative and compliance support, as well as legal representation. Most importantly, the right medical billing partner advocates for “what is fair and just” and leverage provisions enabled by new federal and state legislations to lower costs, achieve savings and maximize a plan’s value and success.
Editor’s Note: Christine Cooper is the CEO of aequum LLC and the Co-Managing Member of Koehler Fitzgerald LLC, a law firm with a national practice. Christine leads the firm’s health care practice and is dedicated to assisting and defending plans and patients.