In the US, the insured patient is often responsible for part of their healthcare costs. The purpose of this cost sharing is to avoid unnecessary medical treatment, with the idea that if the patient has to pay a portion, they are less likely to seek care unless truly needed, and drive the patient to seek less expensive care. Typically, cost sharing is defined in the form of a deductible, co-payment, co-insurance and/or maximum out-of-pocket amount, and it varies per insurance policy.
For example, let’s say a patient is hospitalised at an out-of-network hospital. The hospital bill is US$100,000, and the insurance only covers $20,000. Without the No Surprises Act, the hospital would bill the patient the remaining portion, in this case $80,000. However, with the new No Surprises Act, let’s assume the patient has a maximum out-of-pocket amount of $10,000 in his/her insurance policy. This $10,000 would now be the maximum amount that the hospital could bill the patient, instead of the full $80,000.
International application of US law
This new law, along with all healthcare laws in the US, is complicated and US-centric. However, just like other US healthcare laws before (such as the Health Insurance Portability and Accountability Act, and Affordable Care Act), it does apply to all US healthcare providers, i.e., physicians and other healthcare providers, hospitals and other emergency care facilities, as well as air ambulance and medical transport services including helicopters and airplanes (excluding ground ambulance), and it applies to all individual and group health plans, including self-insured plans. As such, it applies to international patients and international health plans who pay for healthcare services in the US.
The new legislation also defines new negotiation rules with an arbitration clause, called an Independent Dispute Resolution (IDR) Process. In simple terms, the payer has to send a reasonable ‘good faith’ payment within 30 days from billing. Should the provider not accept that payment, the next 30 days will be allowed for the payer and provider to engage in a normal negotiation process. After this period, either party may initiate an IDR process (additional costs will apply).
It should also be noted that in a scenario where a patient knowingly and voluntarily agrees to services at a non-network provider by signing a consent waiver, the patient can waive the federal protections and thus be balance billed. The legislation identifies a list of providers who may not ask for a consent waiver, such as in urgent cases or for ancillary providers at in-network facilities (e.g., anaesthesiologist or radiologist at a hospital).
How can this be applied to international patients?
Most international health plans do not have ‘US-style’ benefit schedules, such as the maximum out-of-pocket amounts described above. Due to this, it can be difficult to use this law to benefit international payers (another reason for international insurance carriers to design their plans to truly protect them in the US!). In other words, the law allows health plans to pay out-of-network bills at their published in-network rates. It further requires the provider to accept those rates and prohibits the provider from billing the patient the remaining balance, in excess of their deductible/co-pay/co-insurance or cost-share maximums. If the payer does not have in-network versus out-of-network published rates, or patient cost-sharing, then a negotiation argument based on these terms might be more difficult to make.
However, it is my opinion that this law can be another tool in smartly negotiating US healthcare costs. Anybody who has paid US medical bills knows that the biggest problem lies with the non-networked providers. This new law can be used in negotiating those out-of-network bills, including both medical bills and air ambulance bills.
Administrative requirements for health plans
In addition to the negotiation aspect, the law also has several requirements that insurance plans and administrators need to be ready to fulfill, such as new ID card requirements and Advance Explanation of Benefits (AEOB).
Starting in January 2022, or at the plan renewal date, health plans must include new information on the insurance ID cards, including all deductibles and maximum limits on out-of-pocket costs (also when there are none). Furthermore, health plans will be required to process Advance Explanation of Benefits (AEOB) before a healthcare service is delivered. If a healthcare service is scheduled more than 10 days ahead, the AEOB must be produced within three business days of receiving an inquiry. If the healthcare service is scheduled less than 10 days ahead, then an AEOB must be produced within one business day from receiving an inquiry. It must include a good-faith estimate of the insurance payment, patient cost sharing, confirm whether the provider is in-network, and if not, how to find in-network providers. The insurer will also have to offer price comparison information by phone, develop a web price comparison tool and maintain up-to-date provider directories.
For air ambulance providers, the legislation mandates an additional task of submitting two years of cost and claims data to federal officials for publication in a comprehensive report to the public. In addition, the law creates an advisory committee on air ambulance quality and patient safety in the US.
The Congressional Budget Office estimates that the No Surprises Act will reduce US commercial insurance premiums by between 0.5 per cent to one per cent, saving an estimated $17 billion over the next 10 years.