Americans are in $140 billion worth of medical debt, while the U.S. spends trillions on healthcare each year. With a
Next year, the price transparency rule, the No Surprises Act and healthcare provisions in the Biden Administration’s reconciliation bill will go into effect. Liliana Salazar, employee benefits attorney and chief compliance officer at insurance brokerage Hub International, views these laws as watered-down federal healthcare regulations — but it’s a start.
“What we will see in 2022 is a very diminished version of what these rules were intending to accomplish,” says Salazar. “But we will still have a large number of mandates that will impact the way that the healthcare system operates.”
Read more:
What does this mean for the future of the healthcare ecosystem? Employee Benefits News spoke with Salazar to uncover just how much these laws will impact the U.S. healthcare system.
To start, what can we expect from the price transparency rule?
Originally, the transparency rule had multiple price disclosure requirements, including a web-based solution that will allow employees to have an Amazon-like experience where they can compare and contrast the cost of care. This would allow an employee to look for a knee replacement and determine what would be the best cost and the best outcome.
Unfortunately, this provision has been delayed — a large portion of the provisions in the transparency rules have been delayed indefinitely, or have been delayed until July 1st, 2023. Because healthcare providers were concerned about their ability to comply with those mandates on a timely basis while still addressing the pandemic, they reached out to the administration and the regulators to request additional time to comply.
In addition to that, there wasn't complete clarity on all of the mandates that they would have to comply with. Therefore, they were seeking additional guidance. The guidance was delayed because of the pandemic as well, which created a little bit of a perfect storm as to what had to be done by when.
Read more:
Do you foresee the price transparency rule ever going into full effect?
I hope so. The transparency rules started originally with the Bush administration. They continued with the Obama administration and then they obtained additional momentum through the Trump administration. So, it’s still significant that a few provisions are going into effect in 2022. They’re not the most meaningful provisions, but I do anticipate that in 2023, absent further delays, we will have some degree of insight on the cost of patient care.
What does the No Surprises Act mean for the healthcare ecosystem?
What the No Surprises Act does is make sure that there are protections granted to the patient when they’re using out-of-network emergency services, using an in-network provider when one of the service providers is out-of-network, or using air ambulance services.
For example, if an individual on vacation gets admitted into the out-of-network hospital with appendicitis, they could face a $40,000 bill. This is because their insurance plan would reimburse the healthcare provider for inpatient, in-network care but, the healthcare provider would deem this insufficient. Now the poor patient would be the one responsible for paying the difference, which in this case could be $30,000.
Read more:
With the No Surprises Act, the healthcare providers will be required to negotiate with the plan provider to find consensus as to what the right amount of reimbursement should be for that particular treatment.
What happens if the healthcare provider and plan provider cannot come to an agreement?
If the plan and the provider are at an impasse, they will be mandated by federal law to go to a third party, an independent dispute resolution company, who will be acting as that mediator. These entities will be certified by the Department of Labor, the Department of Health and Human Services and the Treasury Department. They cannot be owned by an insurance company or be actively involved in processing claims for an insurance company.
These mediators will say what the actual amount is that the provider should receive. The plan must pay this amount. The participant will not be billed for any amount over an excess of what the amount is that the provider has been told to receive. It's like punishment for not playing nicely in the playground. If you don't, you'll go to the principal's office and the principal will determine who is at fault.
Read more:
This is a great win for consumers because the No Surprises Act will force providers and health plans to define what their qualifying payment amount is. So a health plan will have to designate what the reimbursement rate is for a procedure, and the provider will have to understand that the amount that they have historically billed is unreasonable. However, the No Surprises Act has been delayed, with some provisions going into effect as late as January 2023.
How will these regulations affect employers?
There will be an added cost factor involved because now you need to include the fees of the independent dispute resolution entity and the costs of web-based solutions for price transparency. All of those costs will have to be borne by the policyholder, such as an employer.
Hopefully, there will be an offset by the No Surprises Act and it will no longer allow providers to charge 200% or even 2,000% more than Medicare for a procedure.
What reforms should we expect to see in the future?
We should anticipate more focus from the new administration on public options solutions. We will see Medicaid expansion in states that have not expanded Medicaid — that’s part of the reconciliation bill, and it's gaining momentum.
Another area that we may see a focus on is pharmacy spending. We have seen the new administration and prior administration consider expanding the ability to purchase prescriptions from Canada, or trying to implement some safety nets to avoid double-digit increases in prescription costs. We have several proposals in D.C. that, at least on the Medicare side, are intending to impose caps on increases. If that takes place, it will most likely extrapolate into the private insurance market as well.
Hopefully, these are steps towards granting protections for participants that have been left without any form of protection in this system.
