The No Surprises Act (NSA) was signed into law on December 27, 2020, and provides consumers federal protections against surprise medical bills, prohibits balance-billing for certain out-of-network (OON) care, and drastically changes billing and reimbursement processes.
On July 1, 2021, federal agencies published the first set of regulations to implement the law.
The law imposes a hefty list of new requirements on payers and providers and impacts payers in two significant areas — transparency provisions and OON claims processing and payment, which is the focus of this article.
Out-of-network reimbursement and settlement rules for payers
Starting January 1, 2022, providers are prohibited from balance-billing members for items and services received in three situations: OON emergency, OON nonemergency at in-network facilities and OON air ambulances.
The new law adds:
- Pricing, negotiation, and settlement complexity
- Arbitration processes at a national level
- New rules and expectations for reimbursement
When disputes over reimbursement amounts arise, and providers and payers can’t agree, either party can request a binding Independent Dispute Resolution (IDR) process. This final-offer arbitration process uses a government-approved third-party entity to choose either the payer’s or the provider’s offered rate as a final determination.
What payers must consider and act upon for NSA compliance
When assessing the capabilities of a technology partner and solutions through this lens, payers should ensure several boxes are checked:
- OON reimbursement and pre-payment pricing
The NSA does not put any requirements or restrictions on a payer’s reimbursement to a provider for claims applicable under the law, but payers should nevertheless be strategic about their initial reimbursement. Patients who see an OON provider can’t be balance-billed for more than what they would have paid an in-network provider, so it is possible that providers may raise their prices to make up for lost balance-billing revenue. To counter provider charges in these scenarios, payers must be prepared to show defensible, market-based pricing.
Pre-payment pricing Health Information Technology (HIT) solutions are critical to provide this defensibility. It’s important that solutions pull from numerous databases and provider acceptance histories, and account for the various factors the NSA mandates, like acuity and care setting, to inform this pricing and derive fair reimbursements for OON claims.
Payers with payment and pricing solutions that support defensible pricing will be better prepared for successful negotiations under the NSA.
- OON pre-payment negotiations
We can expect that, regardless of the defensibility of a plan’s initial payment, some providers may be inclined to negotiate the reimbursement with their payers, as allowed under the law. Payers need their payment vendor partners to support the process through market-specific negotiation experience and expertise on regulatory and coding requirements to strengthen their case.
Claims negotiation succeeds through a combination of expertise, proactive outreach to providers, and data-informed, demonstrable validity of market rates. These capabilities and processes result in more savings retained prior to payment and optimized reimbursement.
- Arbitration preparation and anticipating results
Especially when the law first becomes effective, providers may “test the system” and bring payers into third-party arbitration (Independent Dispute Resolution or IDR) allowed under the act to see if precedence on pricing can be set. If the payer loses arbitration, it must pay the provider’s requested reimbursement amount and the arbitration fee, and the payer risks the arbitration results being publicly listed by CMS. With much to lose, payers must prepare a concrete argument in advance to successfully argue their case in an IDR and prove the appropriateness of their settlement offer to the arbitrator.
As part of the IDR preparation process, payers should tap their payment vendor partners to provide a pre-arbitration research report consisting of negotiation results and historical IDR data.
- Strategic use of market data
Lastly, to drive greater overall success in the entire reimbursement and settlement process, payers should increase their use of market data which, notably, has been made substantially more accessible under hospital and health plan transparency requirements. Using this data, payers benefit from understanding the impact of different pricing strategies and the likelihood of offer acceptance or rejection during IDR. This foresight arms payers with the unique ability to work through a range of acceptable and defensible pricing scenarios and strengthen their processes for better outcomes.
Compliance is, and will remain, a top priority for payers moving forward, and staying compliant will require new levels of support from payment partners equipped with a deep bench of regulatory and market experts and OON payment solutions built for compliance and alleviation of administrative burden.
Matthew Albright is the chief legislative affairs officer of Zelis.