Don’t Be Surprised By Uncertainty, Embrace Opportunity with New Changes

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By Ryan Day, President, HST, A MultiPlan Company

Uncertainty and change in healthcare are the only things that are certain with the No Surprises Act legislation and regulations. However, this also represents opportunity to leverage the intent of the new legislation – to address skyrocketing healthcare costs in the US. 

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Employers throughout the U.S. expect their group health plan premiums to increase, on average, around 5 percent in 2022, even after taking cost-management initiatives into account, according to recent employer surveys mentioned in the Society for Human Resources Management (SHRM). Health insurers forecast overall costs for health claims are also expected to rise. 

In addition, utilization rates of medical claims in the U.S. are forecast to rise, according to Aon’s 2022 survey of average Medical Trend Rates. The research, which polled expectations of medical trends among Aon offices that broker, administer or otherwise advise on employer sponsored medical plans globally, found 100% of respondents in North America agreed they expect utilization levels to be higher than those observed during 2020/2021.

The impact of the No Surprises Act (NSA)’s myriad regulations are complex and hard to untangle for many healthcare organizations, including payors. The NSA affects in-network plans and out-of-network claims, and a goal of the regulations is to prevent patients from receiving a balance (or surprise) bill after a claim has been paid.

Some employer groups are considering initiatives like reference-based pricing (RBP). These plans were developed to offer employers a way to control healthcare spend and give employees choice in providers based on price, quality and other metrics. Reference-based pricing plans have the potential to continue to show value to employers after the NSA is enacted.

As the NSA legislation addresses claims under plans that use a network, the new legislation only targets a small percentage of RBP claims. Additionally, the No Surprises Act prescribes that the member can’t be balance billed, and a provider and plan must agree on the payment amount or take the case to arbitration. Plans can continue to reimburse surprise bills using the current reference-based price. 

Many self-funded plans elect to go with a reference-based (RBP) pricing model as a substitute to the network – or the facility component of the network – with pricing based on a reference such as Medicare. An important part of all RBP plans are tools that engage the member and the provider to make optimal use of the plan’s benefits.  

Because plans use reference-based pricing differently (i.e., some use a network and then use reference-based pricing for out-of-network claims, or, some use a network for professional claims and reference-based pricing for facility claims, and, still others use it completely in lieu of a network) the effects of the NSA differ. In many cases, it will have minimal impact.

The legislation requires claims to be negotiated post-payment if needed. RBP plans are already using analytics and tools to determine what other people are paying for a service at other like providers, and negotiate on behalf of patients, in the event of a surprise bill. 

For other claims such as non-emergency services delivered out-of-network at an in-network facility, the NSA doesn’t change the way these claims are paid. Plans that use reference-based pricing can continue to pay the claims as they currently and always have. With an RBP plan, there is no facility network, so the impact of the No Surprises Act is primarily for ER and air ambulance claims. 

Some have predicted the passage of the No Surprises Act as bad news for reference-based pricing. With unsustainable healthcare costs continuing to grow, tools that provide value and a more affordable way to keep healthcare costs down will remain a staple of the industry.

Services like MultiPlan’s Surprise Billing Resources have emerged to help answer questions and ensure needed preparations are in place.

References

https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/health-plan-cost-increases-return-to-pre-pandemic-levels.aspx

https://insights-north-america.aon.com/research/2022-global-medical-trend-rates-report

About the Author

Ryan Day, President, HST, a MultiPlan Company, oversees operations and product development, bringing to HST an extensive background in finance, developing innovative technology solutions, and strategy. He started his career with a boutique Wall Street firm specializing in investments and employee benefits for nonprofits and hospital systems.

Healthcare Business Today is a leading online publication that covers the business of healthcare. Our stories are written from those who are entrenched in this field and helping to shape the future of this industry. Healthcare Business Today offers readers access to fresh developments in health, medicine, science, and technology as well as the latest in patient news, with an emphasis on how these developments affect our lives.