More time is essential for the success of the No Surprises Act
Because the Biden administration has been silent on its plans to regulate the No Surprises Act – an important and impactful part of the omnibus spending bill passed at the end of 2020 – healthcare providers and Sponsors of employer-sponsored plans have made every effort to meet the deadline of January 1, 2022, when it will come into effect.
The No Surprises Act calls for an end to most surprise medical bills, the introduction of Advanced Explanation of Benefits (EOB), a comprehensive price transparency tool for consumers, full disclosure of compensation for all health insurance brokers and a variety of other “surprises” this – when regulated – seems like a clear win for consumers. However, this places a huge financial burden on insurers and employer plan sponsors who must create and / or fund the creation of a whole new infrastructure around these deliverables. This huge financial burden could probably end up in our insurance premiums.
Some experts suggest that consumerism and full transparency will ultimately reduce healthcare costs. In fact, the Congressional Budget Office said the No Surprises Act could reduce insurance premiums from 0.5% to 1%, which can be toothless since 18% of our gross domestic product is health care. But there are many forces at work around the issue of price transparency, and it may not keep all of its promises. The American Hospital Association sued the Trump administration in 2019 over a new Department of Health and Human Services rule to display the cost of medical procedures. The rule came into effect on January 1, 2021. In October 2020, the Centers for Medicare and Medicaid Services (CMS) introduced the Transparency of Coverage Rule, also known as the November Rule, a regulation that closely mirrors the provisions of transparency in the No Surprises Act, adopted only a month later. Some would speculate that it was a defensive move by the Trump administration to introduce both a CMS law and regulation calling for the same transparency measures in case the Biden administration uses the overhaul act. Congress to kill the November rule.
The No Surprises Act could revolutionize the way we buy health care. Health economists noted that despite the behavior of Americans in favor of a more consumer-centric model with high-deductible health plans, the noticeable trend of increasing hospital prices was still greater than that of doctors. For inpatient care, hospital prices rose 42%, while doctors’ prices rose only 18% during the same period. Additionally, inpatient outpatient care increased 25%, while physician prices increased only 6%. This provided the empirical data necessary to drive the passage of the No Surprises Act.
One of the most labor-intensive changes for health insurers will be the advanced EOB requirement. Carriers will need to provide consumers with a detailed EOB, with all costs clearly identified, prior to a medical procedure. It will be similar to a quote we get from a body shop or contractor, but the estimated cost of the medical procedure will be based on the actual coverage provided by the health plan the employee is enrolled in. The hope is that our lameness towards consumerism will become more of a gallop.
Benefits brokers or consultants will also be required to disclose any forms of compensation they receive from carriers. Most large consulting firms are already mandated to disclose all income, including bonuses or market income, but small, local brokers have not traditionally disclosed this information to clients. In addition, premium and waiver commissions are often omitted from documents filed by the Department of Labor 5500. This is a victory for consumers and an opportunity for the brokerage community to raise the bar.
More importantly, from January 2022, it will be illegal to charge patients for off-grid costs that a patient unknowingly acquired during a procedure. For example, a patient may have knee replacement surgery and receive an out-of-network fee for the anesthesiologist that she did not choose, approve, or even did not know was in the operating room. The No Surprises Act requires carriers to primarily treat these off-grid costs as internal grid costs. In addition, it introduces the role of an arbitrator to be put in place for health plans and providers to resolve these billing issues.
The No Surprises Act is designed to remove the cloak of secrecy from the healthcare plan world and allow patients to feel more in control of the purchase of their healthcare. While these goals appear to be a positive step forward, until President Biden’s administration issues regulatory guidance or pushes the January 1, 2022 deadline to a more reasonable timeframe, implementing the law could be an issue. complete chaos. And we’ve had enough chaos lately to last a lifetime.
Hubben wrote this piece while working as an associate director for Willis Towers Watson. She is currently vice president at NFP. For more information, please contact Jonathan Cantwell at [email protected]