Positive and negative implications of No Surprises Act from the physician’s perspective

Christine Cooper, CEO, aequum LLC: ©aequum

The No Surprises Act (NSA) is a federal law that was enacted to protect patients from unexpected out-of-network medical bills in certain clinical situations, such as emergency care or instances where patients receive care from out-of-network providers at in-network facilities. This law, which went into effect on Jan. 1, 2022, targets a defined group of “balance bills” named “surprises”, by establishing and enforcing rules for health care providers and payors/insurers.

From the physician's perspective, the NSA has both positive and negative implications which may vary from patient to patient.

Treating patients where the provider is in-network

Generally, where treatment is provided by a network provider, the NSA does not apply and there should be no “balance bills” that qualify as “surprise”.

Providing services in-network offers many positive outcomes:

• Patient identification of the provider in marketing by the network.
• The potential of gaining new patients who seek network protections,
• Reduced administrative expenses from post-treatment billing controversies.

The drawbacks may include:

• Negotiated rates where fees may be less than what might otherwise be charged.
• Increased scrutiny for credentialing and practice.
• Added administrative complexity.
• Gaps in the provider network for specific services – where patients may secure services by competing with non–network providers.

Treating patients where the provider is out-of-network

Again, generally, the NSA does not apply where the patient is treated by a non-network provider where services are not due to an emergency and/or where the services are not provided at an in-network facility. The provider may charge what they believe is an appropriate fee.

Where the NSA does apply, the non-network provider can bill as desired and where the Qualified Payment Amount is less than what the provider deems to be appropriate, they can pursue an appeal through the Independent Dispute Resolution (IDR) process. Data to date shows that the majority of IDR decisions have awarded additional reimbursement to non-network providers.

The negative, of course, is the cumbersome arbitration process. The positives include:

• Non-network providers can identify the QPA and where it is adequate/appropriate:

1. They can receive in-network rates without having to participate in the network, or
2. They might decide to join that network.

• Where the QPA is not adequate and the provider succeeds in the IDR process, additional reimbursement comes from the plan or insurer, not the patient.
• In every situation where the NSA applies, the non-network provider avoids having to pursue patients via debt collection.

Given the above, federal policymakers believe they have identified a solution that benefits both sides, one that reduces patient out of pocket spend while shifting any increased spend to employers/plan sponsors. It is important to remember that “balance billing” is already constrained for all services, not just “surprise” bills, for the almost 50% of all Americans who are covered under Medicare, Medicaid, and the Veterans Administration.

Why all the focus on out-of-network care?

Despite the attention out-of-network and balance billing and debt collection practices have received over the past 15-plus years, spending on out-of-network care represents a small portion of total spending, less than 6%, and that proportion has continued to decrease over time. The decline can be attributed to at least four trends:

• First, the dramatic increase in the percentage of Americans covered under Medicare, Medicaid, and the Veterans Administration, where, for decades, balance billing for non-network providers has been greatly curtailed.
• Second, the significant increase in the percentage of Americans covered under plans with extensive provider networks.
• Third, the significant industry-wide consolidation in medical services and providers.
• Fourth, the significant growth in the percentage of providers who join networks – where, commonly, the breadth of the network can be compared to a river that is a mile wide, with negotiated discounts that are an inch deep.

Coupled with recent changes in medical debt reporting and medical debt collection, along with historical and oft-repeated misrepresentations suggesting that the majority of personal bankruptcies are primarily the result of unpaid medical bills, the NSA adds a new protection alongside Health Reform’s elimination of benefit maximums and imposition of out-of-pocket expense limits. The NSA was, is and continues to be part of a continuing effort by Congress to shift more of the costs incurred by patients with significant medical spend to taxpayers, employers, etc.

Value offered by a medical billing partner

Medical billing partners can assist in helping providers who must comply with NSA requirements.

Transparency: Under the NSA, health care providers are now required to provide clear and detailed cost estimates. This increased transparency benefits patient engagement with providers by establishing a mutual understanding and agreement on the total cost of care in advance of rendering services and scheduling surgical procedures.

Competitive Advantage: Providers who embrace and proactively communicate transparent pricing to their patients may gain a competitive advantage. Patients are likely to prefer providers who are clear about costs and who won’t surprise them with unexpected bills. Transparency enhances trust potentially improving outcomes from health treatment.

Importantly, many in-network providers have already negotiated fees at rates that exceed the Qualified Payment Amount – adding to the competitive advantage of participating in a network.

Increased In-Network Utilization: As patients gain access to tools and resources that compare health service costs, there may be a higher likelihood that they choose providers within their network. This can lead to increased patient volume for in-network health care providers.

Stable Reimbursement: The NSA establishes a fair and predictable payment mechanism for out-of-network services provided in emergency and non-emergency situations. This stability in reimbursement can be advantageous for healthcare providers, ensuring they receive reasonable payments for their services.

Dispute Resolution and Mediation Process: NSA’s provision of an Independent Dispute Resolution process removes the patient from the process – minimizing debt collection and its impact on the provider/patient relationship.

Impact on Reimbursements: Some health care providers, especially those who frequently deliver out-of-network care, might experience reduced reimbursements from insurers due to the regulations imposed by the NSA, and especially if there is a dispute that requires the payer and provider to initiate the IDR process. This could potentially affect revenue streams for a small number of providers.

Administrative Burden: Complying with NSA regulations can increase the administrative burden on health care providers. This might require additional resources and time, impacting their overall efficiency. Providers can avoid the NSA by joining networks.

Potential for Unintended Consequences: There is concern that the Act may limit certain providers who provide specialized care who will no longer provide services in emergencies or in network facilities as a means to avoid the complexities associated with the law.

By and large, the NSA provisions do not affect providers who serve patients and accept Medicare, Medicaid, the Veterans Administration, or network requirements. This likely includes 95+% of all medical services Americans receive. And the NSA does not apply to a significant percentage of those services provided by non-network providers. Where the NSA does apply, it offers non-network providers the advantage of removing the patient from the fee and billing dispute over the value of services provided and offers certainty regarding the reimbursement through the QPA process – with the opportunity for the provider to initiate arbitration where the QPA is deemed to be inadequate.

A medical billing provider can assist providers in their efforts to improve transparency and patient engagement.

About The Author

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.