The US has some of the most advanced medical facilities available globally, but the healthcare system is expensive and difficult to navigate – even for US citizens. For international visitors who may be used to a universal healthcare approach and no out-of-pocket payments, it can be a minefield, and they need careful management to ensure they aren’t just turning up at the emergency room in New York with a sore throat and upset stomach.
Jason Davis, Senior Vice President at Phia Group, said: “Over the past few decades, medical costs in the US have ballooned, without anyone knowing what they’re paying for (no rationality or transparency in pricing), placing a massive burden on American families, as well as companies offering employer-based health coverage. International payers have also felt the sting.”
In addition, ‘surprise’ medical bills are a growing problem. This occurs when a patient is treated by a non-contracted provider through no fault of their own – i.e. a trip to the emergency department of the nearest hospital or an air ambulance transport – and is subsequently billed for the amounts not covered by their insurance. It is no surprise (pun not intended) that medical debt has often been cited by studies as the number one cause of bankruptcy for individual Americans.
‘Surprise’ medical bills are a growing problem in the US
Monica Rummelhoff, Executive Director at GMMI, Inc., said: “In many ways, the US healthcare system shares the same challenges as those around the world. Similar to other countries, the US system is overburdened, short-staffed and still working to recover from the pandemic. What can be unique about healthcare in the US is the complexity of its challenges, the costs that these different challenges can amount to, and due to the inherent complexity, the range of individuals and organisations that are ultimately impacted.
“It takes multiple moving parts to get a patient the right care and to get that care paid for. Without a dedicated team monitoring, reviewing and continuously evaluating a case, oversights can be made, and those result in additional and avoidable costs. We recommend working with a healthcare-centric cost containment partner to help protect the patient and prevent these errors and extraneous costs before they materialise.”
Wild West of pricing
Rummelhoff said: “One of the most challenging and expensive aspects of the US healthcare system is its complexity. Knowing how to understand an insurance policy, navigate the system and advocate for the best interests of the patient can be difficult and time-consuming, especially if you don’t have a medical background or are unfamiliar with US healthcare.”
“To further combat rising costs,” Davis added, “and try to break the cycle, in November 2019 the Department of Health and Human Services (HHS), Department of Labor (DOL) and Department of the Treasury (USDT) (collectively the ‘Departments’) issued a final rule on Transparency in Coverage, requiring hospitals to disclose specific pricing information, including gross charges, discounted cash prices and contracted rates with health plans. The plans are (now) also required to publish what they pay for services by posting machine-readable files on their websites. Every contracted rate for every service is now on the internet,” Davis concluded.
Without a doubt, the NSA is the largest development in US cost-containment history
Raija Itzchaki is the owner of Results International Consulting, and explained the latest law changes affecting the delivery and price of healthcare in the US: “In 2020, President Donald Trump signed an executive order on Improving Price and Quality Transparency in American Healthcare to Put Patients First.
This order was a historic step in US healthcare to put price information out to the public for patients to make informed decisions. The initiative, called the Price Transparency Rule, consists of two main parts: 1) Hospital Price Transparency Rule, and 2) The Transparency in Coverage Rule.”
The Hospital Price Transparency Rule aims to help Americans know the cost of hospital services before receiving care. From January 2021, every hospital operating in the US was required to provide clear pricing information online about their items and services. The rule requires hospitals to report: 1) comprehensive machine-readable files with all items and services, and 2) a consumer-friendly display of at least 300 ‘shoppable’ items and services. These are related to healthcare that the consumer can schedule in advance (e.g. a knee or hip replacement). It does not apply to emergency services (the No Surprises Act was enacted to address this). These 300 shoppable items must include the hospital’s gross charges (billed charges as per the hospital chargemaster), payer-specific negotiated rates, minimum and maximum de-identified negotiated rates (with all payers), as well as cash prices to the uninsured.
Price and quality transparency
However, rules are apparently not always observed! “Unfortunately,” said Davis, “many hospitals still appear to be out-of-compliance with these regulations. While it will likely be some time before this information is synthesised in a way that patients can use it meaningfully, it does help organisations like The Phia Group when negotiating reasonable rates on out-ofnetwork claims.”
Itzchaki pointed out: “As of the end of 2022, most US hospitals have not yet made their pricing information public. Although the rule includes monetary penalties, it has been criticised that the penalties are too low, and hospitals are choosing to pay the penalty rather than publicise prices. Several lawsuits have been issued by various hospital systems against the Hospital Price Transparency Rule.
It remains to be seen how the rule will be enforced and when the information will become public,” Itzchaki concluded.
The second part of the transparency act, the Transparency in Coverage Rule, has two main parts. Firstly, it requires health insurance plans to provide access to an estimate of the patient’s cost-sharing information through an internet-based self-service tool. However, for the international payer market, the most interesting part of this rule is that it also requires US health insurers to disclose on a public website three key pieces of information:
1. In-network negotiated rates for all items and services
2. Both billed charges and allowed amounts paid for out-of-network providers
3. Their negotiated rate and historical net price for prescription drugs.
These files were required to be made public for plan years that begin on or after 1 January 2022. “However, once the final rule was announced, health insurers quickly criticised it, arguing that it is unnecessary and will lead to higher, not lower, healthcare prices,” said Itzchaki. Several lawsuits have been issued and it currently remains unclear if the rule will be challenged in the courts. Although the rule required pricing information to be available starting in January 2022, very few health insurers have made this information public.”
Once the information is truly available, the Price and Quality Transparency Rule will have a major impact for all payers of US healthcare. The international payer community will benefit tremendously from having access to the hospital and payer pricing data. This will allow a payer, a cost-containment company or negotiator to have real data to back-up their negotiation process.
As part of the Consolidated Appropriations Act of 2021, the government also enacted the No Surprises Act (NSA), taking effect on January 1, 2022. The NSA banned surprise billing arising from three circumstances:
• Out-of-network emergency services
• Medical services provided by an out-of-network provider at an in-network facility
• Air ambulance services. The goal of the NSA was to force providers and insurers to resolve payment disputes without involving the patient. Under the ruling:
• Balance-billing is prohibited
• Open Negotiation period and binding ‘baseball style’ arbitration are available for claim resolution.
“The NSA has effectively eliminated surprise medical bills for Americans with healthcare coverage, but it also changed the way networks are contracted,” explained Davis. “For years, there was a pressure to offer a broad network that would include providers with bad quality and egregious billing patterns; to not include these providers would expose members to emergency claims and crippling balance billing. Now with the NSA… why not kick out low-quality providers or providers whose services are overpriced?”
The Hospital Price Transparency Rule aims to help Americans know the cost of hospital services before receiving care
Without a doubt, the NSA is the largest development in US costcontainment history, but more importantly, it brings protections for hundreds of thousands of otherwise hapless American consumers and their families. Is the NSA an opportunity for differentiation in cost containment? “Yes,” said Davis. He argued that the international payer community should try to leverage the NSA to improve their costcontainment results.
International payers feeling the pinch Travel insurance organisations providing coverage for travellers/expats to the US are the first line of defence in navigating the system. Traveller care needs are typically accidental or acute, so they require the right coverage for care to occur quickly. Aside from coverage for care, patients require a simplified, cohesive, high-touch model that makes the coordination of that care seamless.
Rummelhoff said: “The international insurance community can more effectively reduce costs and improve member and provider experience by enhancing the lines of communication, applying incentives for utilising networks (steering members to preferred providers), requiring timely and proactive case reporting so that care is properly monitored (to limit risk of duplication of care or overtreatment), and investing in technology. The more that insurers can work together to educate and assist their members, share data and information in a manner that is safe and secure, and ultimately streamline efforts, the more savings can be passed on to patients and providers alike.”
Travel insurance organisations providing coverage for travellers/expats to the US are the first line of defence in navigating the system
Gitte Bach, President and CEO of New Frontier Group, spoke to ITIJ about a few key elements that support simplifying the navigation of the system. These include early intervention, relationship management and prescription medication programmes. With regards to intervention in the patient care pathway, she explained: “The earlier the better to be able to guide and support clients and patients to the correct place of care.
“US provider organisations can be very complex, so it is of utmost importance to have relationships and guaranteed access in place – to steer patients to the right providers, for the right care, at the right price,” she added.
Prescription costs are astronomical in the US, and insurers can be billed per pill if they aren’t looking carefully at how these are managed. Bach suggested having an integrated global Rx program that crosses borders and is coordinated with a medical programme, which is key to getting the best outcomes with the least hassle.
Technology also has a role to play for insurers seeking value for money from the care their clients are receiving, and the increasing acceptance of telehealth solutions by all parties – hospitals, insurers and patients – can be a valuable addition to a cost-containment toolbox. With the right use of telemedicine, triage and ED costs can be avoided, and care needs can be assessed quickly and easily, said Bach.
She concluded: “When it comes to where the members fit in, they require a seamless service. We, as an organisation, need to be sure that we are treating the whole person to create the best possible outcomes and avoid complications that lead to readmissions.”
Ongoing learning curve
Insurers and assistance partners that think they understand how the US healthcare system works must keep up with legislative changes, how these affect payers and providers, and what it means for the international market. While the Affordable Care Act, Transparency Act and No Surprises Act have all been aimed at changing the domestic market, they undoubtedly have an impact on international payers. If hospitals don’t feel they are being reimbursed effectively by the government, they may look elsewhere to boost their bottom line, and travel insurers from far-off lands may be seen as ‘fair game’. All these acts have different intentions and outcomes. Understanding them will help payers to navigate the complex and costly US healthcare market in years to come.