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The “No Surprises Act” went into effect on January 1, 2022 and has been much lauded as a win for consumers, protecting Americans from an estimated 10 million surprise bills annually. This legislation has been needed for a long time. In theory, this is a good thing for people receiving emergency medical care or having surgery in a hospital where they don’t have the ability to choose their anesthesia team or the radiologist that reads their x-rays. But the reality is not so clear cut, even though the legislation limits responsibility to a patients in-network deductibles, copays or coinsurance.
There is still a lot of grey area. Medicare and Medicaid already prohibited balance billing of patients, so the legislation was primarily directed at private health insurers who are known to limit their provider networks intentionally and those policies bought on and off the exchange under ACA. The American Hospital Association and American Medical Association have both filed lawsuits that relate to how the regulations deal with dispute negotiations between payers and providers. Interestingly, the law applies to air ambulance but not ground ambulance (both of which are typically out of network in commercial insurance plans) and are the source of MANY surprise bills.
The controversy around the bill is two fold: 1)Who determines the amount of the bill? An 2)How will it be policed?
Who Determines the Amount of the Bill?
Payers wanted the payment amounts to be based on negotiated rates that were local, because that data rested readily at their fingertips and NOT arbitration which would cost time and money getting to a final decision. The payer argument was based on the entry of private equity firms buying hospitals and provider groups with the sole focus of revenue (again choosing proactively to NOT participate in the provider network), not patient treatment or experience.
The provider community argued the opposing point of view, supporting individual negotiation or mediation rather than a generally agreed upon standard they viewed as price fixing. In the end, the legislation was written to mandate dispute resolution through an independent review process. While arbitrators are to use the local median in-network price for the service they can also consider other contributing factors, like patient condition, physician training and expertise, market share and historical negotiations/relationship. How that actually works in practice remains to be seen, leaving a lot of grey area.
How is the No Surprises Act Policed?
Payer
The answer is an unimpressive “it depends”? While the federal government enforcement responsibility private health plans, there are a number of different federal agencies that may play a part including the department of treasury and department of labor. For States, it is a bit more straightforward. They will have enforcement responsibility for state-regulated plans but there will be a federal safety net, with fallback enforcement by HHS when states do not substantially enforce the regulation. And complicating this further are self-insured plans sponsored by non-federal public employers. In this case, HHS also has responsibility for enforcement. And finally, there is the Federal Employees Health Benefits Program (FEHBP), with enforcement authority resting with the Office of Personnel Management (OPM). And then comes the audit….The National Security Administration requires the Department of Labor to conduct 25 claims data audits for group health plans annually to monitor compliance and another 9 audits at the state level.
Provider
States have the primary responsibility for enforcement in the rule when it comes to providers, with federal agencies serving as a secondary resource, even when the patient is covered by a federally regulated health plan. There is also some discrepancy over whether state attorney generals, hospital commissions or state medical boards will have responsibility and authority to police the providers. Adding to the severity of this is that HHS has proposed 200 investigations PER MONTH targeted to providers starting now.
So what does this mean for hospitals and provider organizations? It means the way you determine charges and how you bill patients may need to drastically change in ways that you may not expect. As revenue cycle experts, we are here to help identify both process and technology changes to ensure your organizations compliance so that there are “No Surprises” for either your organization or the patient.
Interested in learning more? The team at VisiQuate is focusing on how we can help hospitals optimize their revenue cycle management. Visit our Revenue Cycle Playbook for step-by-step plays to help you stay on top of the ever-changing landscape of healthcare revenue cycle, or contact us to schedule a demo.
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