An ongoing commentary from Healthlink Dimensions
Signed into law Dec 27, 2020
First effective date: Jan 1, 2022
Part of the Consolidated Appropriations Act, 2021
Congress enacted the No Surprises Act as a means of consumer protection from unexpected medical bills mainly from out of network providers that either 1. patients didn’t choose or even know were out of network, or 2. emergency providers that the patient had no choice whether they used or not. It is common for a patient receiving medical care in a hospital to receive bills from many different doctors, laboratories, imaging centers as part of their care. When one of these providers is out-of-network, the patient may be stuck paying the difference between the provider’s billed charges and what their insurance company pays for an out of network provider. This practice is known as balance billing and can cost patients thousands of dollars.
The No Surprises Act requires that if a patient is being treated in an in-network facility, all services from all providers be treated as in-network. It also requires insurance companies to pay in-network rates and protects them if a patient sees an out-of-network doctor that is still listed in the insurer’s directory as in-network. Payers must also now validate the accuracy of every provider in their directory every 90 days. Emergency medicine doctors and air ambulances also have to be covered as in-network. In a rare exception, ground ambulances were specifically excluded from the requirements.
So, what does this mean to insurers? First of all, they need to be able to know when to apply in-network rates on many new scenarios and are working hard to comply. They also need to be able to calculate what the law defines as a Qualifying Payment Amount (QPA) or find other means of determining the market average payment for every procedure code or bundle to pay the out-of-network providers.
For providers that are out of network, they will see a change in their billing practice in that they cannot balance bill their patients. The law indicates strict fines for any unauthorized balance bill to a patient. The No Surprises Act effectively takes the patient out of the middle of this argument by putting the negotiations between the provider and the payer. Providers can either accept the QPA from the insurer as a fair rate or dispute it with the insurance company. If payer and provider cannot reach agreement, the provider may request the use of an Independent Dispute Resolution (IDR) process where the provider and payer both submit a price, and the arbitrator chooses one or the other.
Another way the law seeks to remove surprises is by creating a way for patients to get an estimate before undergoing treatment. First, it requires certain information be added to all member ID cards so that both patients and providers know how much is owed by the patient. Second, and more importantly, patients who either schedule a procedure or who ask providers up front for an estimate will be able to either receive a good faith estimate. They receive this directly from the provider if they are self-paying patients, or have their provider send the estimate to their insurer and receive an Advanced Explanation of Benefits (AEOB) with what the insurer will pay, what the member may owe, and any prior authorization requirements or other restrictions before getting the procedure. Insurers are also required to create online transparency tools that show their members what their out-of-pocket costs may be for many different procedures. Some of the NSA requirements align with Transparency in Coverage, but some are unique to NSA. Rulemaking will have to sort out the differences and what insurers will ultimately have to do to comply.
All in all, it’s a big undertaking for the industry which is grappling with how to navigate the fragmented billing system. For example, a surgeon or a hospital will have to gather together all information from all the providers that might be included in a surgery to create their estimates. Anesthesia, labs, drugs, hospital room charges, doctors who review x-rays or interpret laboratory results will all need to be included in the price. Insurers on their part will have to be able to run the claim through once before the service happens to generate the AEOB, and then run it again for payment after the procedure happens.
Need immediate insight into network status across all providers involved in a patient’s treatment? Has provider credentialing and availability been difficult to verify? That’s why we built Provider Directory Advantage, the industry’s deepest, most intuitive database of providers, constructed specifically to meet the challenges of the No Surprises Act.
Contact us today at 404.480.6381 to learn more about Provider Directory Advantage and how to integrate timely, accurate provider data within payer directories and databases – quickly and cost-effectively.