Don’t Let the No Surprises Act Catch You Off Guard!
By now, anyone providing healthcare plans as an employee benefit should be aware of the new No Surprises Act, effective at the beginning of 2022. Whether you are the human resources manager tasked with outsourcing this important benefit or the health insurance broker providing options to companies for coverage, the new law has several components that must now be met and coordinated through plan sponsors.
The good news is that the No Surprises Act adds more transparency and accountability – all designed to protect the consumer. However, what is coming as a surprise to many companies that self-fund their employer healthcare plan, is that the employer is the one responsible for all compliance.
What are the key provisions of the No Surprises Act?
Increased transparency is the overarching intent of this new law. Designed to make healthcare costs easier to understand, providers and plan administrators must provide more information to members than ever before. Examples include:
- Providing timely good faith estimates of costs
- Clearly outlining the explanation of benefits once charges have been submitted by the provider
- Offering cost comparison tools easily accessible by the member
How are self-insured employers impacted by the No Surprises Act?
Employers must be aware that their members cannot be balanced billed (Balance billing) for emergency services, non-emergent services from out-of-network providers provided at in-network facilities, and out-of-network air ambulance services. Patients will only be responsible for paying their in-network cost-sharing. If there is a difference in the cost of service, once all applicable deductibles or co-pays have been met, the employer is responsible for working with the provider to cover the remainder of the bill. The provider and the plan administrator have set guidelines for negotiating the final payment.
What steps should self-insured employers take to protect their bottom line?
It is likely the No Surprises Act will increase plan costs through both claims and IDR (independent dispute resolution) fees. Additionally, insurers will ask for increased administrative fees to provide services required by the law. But there are two important steps employers can take to minimize the financial impact.
- Self-insured employers should ascertain from their third-party administrator (TPA) how the QPA (Qualified Payment Amount) will be calculated. While compliance is the responsibility of the employers, most payments will be made by the TPA. The QPA is a newly created term in the act and is the plan’s median contracted rate — the middle amount in an ascending or descending list of contracted rates. If an employer doesn’t know what that QPA amount is, predicting costs is much more difficult.
- Employers should fulfill their fiduciary responsibility and request comprehensive external audits of their medical plans to make sure their TPA is processing claims correctly. Unfortunately, many TPAs restrict audit rights to a random sample selection of paid claims that can be reviewed. And many self-insured groups aren’t auditing their paid claims at all. Auditing medical claims is an industry best practice and should be standard practice for self-insured employers.
Having a plan provides peace of mind.
A thought-out plan for implementing the requirements of the act should be in place for any company that provides a healthcare benefit to employees. Plan sponsors should review the new requirements of the No Surprises Act with consultants, service providers, and legal counsel. The plan should detail who will be responsible for monitoring the impact of the new law. One of the key components that should be included in a plan is regular, comprehensive audits. Audits not only find and recover overpayments but also identify systemic issues within the payment process. Mistakes happen, but they are even more likely to occur when new policies and procedures are put in place. Finding the mistakes early helps contain costs for both the employer and the employee.