As healthcare costs continue to rise, surprise medical bills top the list of affordability concerns for a majority of Americans – two in three American adults worry about their ability to afford an unexpected medical bill, according to the Kaiser Family Foundation. Fortunately for patients, after nearly two years of Congressional debate, the No Surprises Act (NSA) was signed into law on December 27, 2020, representing a significant milestone for patients. On July 1, 2021, federal agencies published the first set of regulations to implement the law.
While this legislation is necessary and long overdue, it presents new challenges across the healthcare continuum as providers and payers scramble to understand the new requirements while simultaneously adjusting their systems, processes and technological capabilities in order to comply by the January 1, 2022 deadline. From large health plans and systems to small medical offices and individual providers, stakeholders across the industry are convening to dissect the details of the legislation before operationalizing the requirements.
Key Implications for Providers
At a high level, the new legislation protects patients from receiving surprise medical bills for emergency care delivered at an out-of-network (OON) facility or by OON providers at an in-network facility, which also includes air ambulance services. Furthermore, it also prevents OON providers at in-network facilities from balance-billing patients for non-emergency care unless they get prior patient consent. Under the legislation, patients can generally expect to pay what they would for the same service if it were provided by an in-network provider.
In terms of provider reimbursement for these services, the legislation and subsequent regulations say if there is a state-required reimbursement process that applies to those items and services, then the state law takes precedence. If there is no applicable state law, the NSA outlines a reimbursement process that providers and health plans must follow.
According to the NSA’s reimbursement process, a health plan reimburses the provider an initial payment, though the NSA does not require a specific rate of reimbursement. If the provider does not agree with the payment amount, they have 30 days to negotiate a different amount with the health plan. If this negotiation fails, then either party can access a binding Independent Dispute Resolution (IDR) process, which takes an additional 30 days. This final-offer arbitration process will use a government-approved entity to choose either the payer’s or provider’s offered rate as a final determination – with no ability to split the difference between the two proposals.
Tips for Providers to Prepare
To stay compliant under the NSA, it is critically important that providers monitor for any changes to the law to ensure they’re prepared to execute the law’s complicated, comprehensive requirements. A combination of education, collaboration and process transformation will be key in this effort.
1. Overcommunicate with payers
The multiple requirements mandated in the NSA will be a difficult lift for providers and payers alike. In particular, the narrow window within which providers and insurers must complete adjudication, remediation and arbitration is aggressive. The window is about 120 days post-service and will likely be one of the most challenging areas for the system to tackle, particularly for substantial claims. As the January 1 deadline looms, providers and payers will need to proactively collaborate and overcommunicate with each other to be compliant by January 1 and beyond.
2. Use IDR as a last resort
In general, providers may want to avoid the IDR process or, at the very least, be well-prepared to win. The NSA built in numerous disincentives to discourage both providers and payers from going through the IDR process. For example, the arbitration approach is “baseball style,” which means that the IDR entity chooses a winning reimbursement offer, in contrast to arbitrating a win-win compromise. The losing party is also required to pay for the IDR process, and both the winning and losing parties must pay an annual fee to the government for administrating the process. Finally, the Centers for Medicare & Medicaid Services (CMS) will be publishing arbitration decisions in a quarterly report that will be available to the public.
3. Leverage digitization beyond NSA
As stakeholders adopt new processes and capabilities to comply with the requirements, payer organizations will likely adopt new technologies, such as OON payment solution technology, which will advance healthcare’s continued push towards digitization. As such, the NSA presents providers with an opportunity to adopt new technologies for their revenue cycle management.
Beyond the NSA, providers can leverage technological innovation more broadly. For example, keeping track of paper-based payments and remittance advice can be a daunting task for providers. With contactless payments, staff can accomplish more with less – administrative work involved with processing claim payments is reduced while costs associated with human error are slashed. Providers can also access funds without unnecessary printing and mailing. Ultimately, by switching paper-based payment processes to electronic, providers can improve efficiency, reduce costs and increase payment speed. For providers who haven’t yet made the switch to digital, the NSA serves as a catalyst to realize the economic and time-related gains digitization provides.
The Road Ahead
At its core, the NSA addresses the root market failure in which patients lack meaningful choice of providers for certain services, particularly in emergencies. However, the legislation also presents new challenges, as providers and payers must rapidly learn about and comply with the lengthy list of complicated requirements. From the patient-facing Advanced Explanation of Benefits to adjudication, arbitration and settlement, alignment with the NSA requirements will require proactive communication among stakeholders, who will also need to adapt internal capabilities or outsource solutions, most likely a combination.
Ultimately, the new legislation represents a pivotal moment in healthcare as the industry continues to shift towards consumer-centered care.