Partner & Co-Founder at Kuroshio Consulting Inc., a management consultant with 20 years of international strategy consulting experience. 

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As a business owner, and one with more than 20 years of experience in the healthcare space, I know that maneuvering through the outrageous complexity of the provider and payor space to offer healthcare to our employees was beyond taxing. So, I can’t imagine what it must be like for the average consumer. Why is it that I can get a quote for just about any service these days through an app on my phone within minutes, but asking for transparency in what I might be charged as a patient is an insurmountable task?

Case in point, if someone undergoes surgery at a hospital, the total cost is known only months after the date of care and flits into their mailbox through multiple invoices from different departments at the same hospital. This also might include “surprise” out-of-network bills, which can be exorbitant. So why do patients have to pay outrageous rates for out-of-network providers when they often lack the opportunity to choose? For surgical procedures, people can typically pick their hospital facility and primary surgeon, but they can’t select any other member of the surgical team (for example, anesthesiologist, radiologist). The same goes for emergencies when someone is transported to a hospital outside of their network or an in-network hospital that is staffed with out-of-network clinicians.

The anticipation of the No Surprises Act, which will be effective January 1, 2022, is palpable and represents a big win for patients, in my opinion. The act makes it illegal for providers to bill patients for anything more than the in-network cost-sharing due under insurance in almost all cases where surprise out-of-network bills arise (the exception here is ground ambulance transport). The treatment of these services must be as if the providers were in-network, for cost purposes. The act applies to all commercially insured patients (public insurance programs, such as Medicare and Medicaid, already offer protections).

Now, keep in mind that the starting intentions of using both in- and out-of-network providers were good. As a society, we want to make sure that emergency physicians and ancillary specialists are able to provide care to patients, regardless of their ability to pay. The challenge, however, is that certain providers have used surprise out-of-network bills to obtain high prices for services rendered, thereby creating debilitating debt for patients. To ensure that out-of-network care providers (emergency and air ambulance services) have some leverage to negotiate with payors, the act also gives them the ability to initiate arbitration (for example, if they are dissatisfied with how much a health plan pays them).

So, what are some of the protections that the act will bring patients? The primary protection is the notice and consent process. An out-of-network provider must notify a patient of their status and obtain written consent to receive out-of-network services more than 72 hours before it's provided. This brings the decision-making ability back to the patient. In scenarios where patients are unable to select, the act defines a “no exception group,” and insurers must treat all of these clinician's services as in-network for patient cost-sharing, deductibles and out-of-pocket limits. Note that several states have existing laws that regulate surprise billing, but many don’t prohibit surprise billing for emergency services; the federal law will cover these services as well and will supersede state laws.

What can health systems and payers do to make the transition easier for consumers? They can:

• Make the information on cost estimates and explanation of benefits easily digestible for consumers.

• Design the journey with the consumer in mind so that cost estimation tools and obtaining proof of consent are personalized and easy to use.

• Engage with and communicate with consumers so they understand why some services are priced differently and the charges they are responsible for when out-of-network providers are involved for nonemergency cases.

The increase in transparency allows for a clear and upfront understanding of cost-sharing liability before receiving a healthcare service, which brings choice back into the hands of patients. Balance billing on surprise bills can range from hundreds to thousands of dollars. The new act will allow patients, where possible, to obtain an estimate of costs and cost-sharing from a provider before obtaining services. Moving away from a lottery system and toward informed decision-making is a giant step in patient protection, and I, for one, couldn’t be more excited.