By Dan D’Orazio,
CEO, Sage Growth Partners
The No Surprises Act (NSA) has been in effect since January 1 to protect patients against an estimated 12 million surprise bills this year. Yet, while the goals of consumer protection, price transparency, and cost concessions are important and necessary, the legislation is starting to present real challenges to practices’ finanancial stability.
Fulfilling the new regulations places additional burden on practices’ already tight time and labor resources. For practices to survive without further unexpected surprises, they must act quickly.
Protections for patients—and for practices
Providers would be wise to consider the legislation from two angles: protection and growth. For patients, protection means no surprise billing; for practices, it means preventing violations and preparing for arbitration.
In essence, the No Surprises Act prohibits out-of-network providers from billing patients more than a payer’s applicable in-network cost sharing amount, known as balance billing. If this happens, providers risk a penalty of up to $10,000 per violation. To protect themselves, providers must now be ready to:
- Provide a good faith estimate (GFE) of expected charges and diagnostic codes within one to three business days after an item or service is scheduled.
- Submit any surprise out-of-network bill directly to the patient’s health plan, ideally with self-identified determinations of whether No Surprises Act protections apply.
- Notify patients of their protectionsby posting information prominently at the location of the facility, posting it on a public website, and via a one-page handout.
- Never ask patients to waive their rights for emergency services or certain non-emergency services, nor appear in any way to coerce a patient to do so.
The most significant area in which practices must start to protect themselves will likely be the new Independent Dispute Resolution (IDR) process, a strictly regulated baseball-style arbitration for contesting unreasonable reimbursement amounts with insurers. Physicians will not only need to become savvy at submitting bids to receive more favorable reimbursements but also because the loser in the arbitration may be required to cover fees for both parties.
Will the No Surprises Act help or hinder growth?
Whether the law will allow physicians, especially those who take call or provide emergency care, to grow their practices under their current business models remains to be seen. That’s because the cost of achieving and sustaining NSA compliance and retaining legal counsel may overtake revenue from reimbursements.
If a portion of a provider’s revenue stream now moves to just above Medicare reimbursement levels, it will be difficult for practices to stay viable. There are a few options to combat this, and all require additional time or money or both before they generate ROI: Increasing volume, negotiating with more insurers to go in-network, and adding ancillary services, although those services may also be regulated by the NSA.
Another issue impacting growth is the uncertainty around the IDR process, as the rules keep changing. Early this year, several state medical associations and air ambulance companies filed suits about the interim final rule that bases appropriate reimbursements on insurers’ qualifying payment amounts (QPA). In April, 2022, CMS retracted its stance on just how much weight QPAs should carry in arbitrators’ decision making.
Steps practices should take to prepare
Practices should begin taking the following steps to limit any negative impacts of the No Surprises Act:
- Track the data. Data analytics are now more important than ever. Make the effort to start building case data to prove a track record. Gather data for each case on complications and readmissions. Reach out to hospitals to gather length-of-stay data. Ideally, as a provider collects more data his or her outcomes can be compared to published national norms.
- Promote quality via marketing. Physicians must continually market the quality of their care through practice statistics, patient stories, blogs, public relations, and social media. This substantiates a provider’s ability and availability to referring physicians while establishing a record of quality and expertise in the public domain. It also helps create a groundswell of patient demand that can motivate insurers to negotiate a competitive in-network contract and increase volume.
- Focus on outcomes. In addition to quality measures, IDR arbitrators can consider factors including the experience and training of the provider. The physician is allowed to present this type of information at arbitration to justify a higher payment than the QPA. The physician can also present data showing that his or her outcomes for the case or disease are superior to the norms as well as how its data has helped the practice improve efficiencies and quality controls.
- Enlist an advisor. Smart providers will invest in additional labor or outsourcing to manage the new billing and arbitration requirements. That means preparing to invest in legal and workflow advisors who specialize in healthcare and can help providers prepare for the new normal.
- Do the math. Physicians must become acutely aware of their own revenue cycles: What they’re getting paid, by whom, payment timeframes, and which procedures are continually denied.
The onus lies on providers and practice administrators to ensure that they understand and prepare for the requirements of the No Surprises Act. It is vital for to proactively evaluate strategies to respond to these market changes and ensure practice health and financial stability.
Dan D’Orazio is the CEO of Sage Growth Partners, a national consultancy that accelerates commercial success for B2B, B2B2C and B2C healthcare organizations.