No Surprises Act: Payer Concerns, Strategies for Compliance

Matthew Albright, chief legislative affairs officer, Zelis, discusses a Zelis survey highlighting payers’ concerns about No Surprises Act requirements, and offers advice for payers seeking to achieve compliance.

Read the full transcript:

I'm Matthew Albright. I'm chief legislative affairs officer for Zelis. Zelis is a health IT company that prices, pays, and explains health care claims to members, payers, and providers.

I've been at Zelis for about 5 years. Before Zelis, I worked with the Centers for Medicare and Medicaid Services (CMS). I was a regulator. I wrote some regulations under the Affordable Care Act.

Before CMS, I worked for the state of Washington and wrote some regulations back there on their health care issues. Before that, I was a philosophy and ethics teacher at some small colleges up in the Northwest.

What were some key findings from the Zelis survey about payers’ concerns regarding the No Surprises Act?

The media, politicians, and the people that passed the No Surprises Act were thinking about that balance billing prohibition, which was absolutely a key part of the No Surprises Act.

If you think about the iceberg, the balance billing prohibition was just the top, and then there's a whole set of requirements that aren't getting a lot of attention that are going to be a heavier lift for health plan payers and for providers as well. That's the transparency requirements.

That survey found more than half the payers that we queried were not ready for those transparency requirements or concerned about the compliance dates. A little bit more than 40% hadn't chosen a solution or a vendor that could help them with those transparency requirements.

That was the big surprise. Another point of big concern was what the law calls the Advanced Explanation of Benefits.

Very heavy lift, very disruptive—perhaps in a positive way in the long term—but a very disruptive requirement that we can talk about a little bit later. The transparency requirements were the big thing. We don't hear a lot about them, but it's certainly what has payers thinking a lot about how to meet those compliance dates.

What are payers doing to achieve compliance?

Again, if you think about the iceberg, the top of the iceberg are those balance billing prohibitions. Thankfully, a lot of the responsibility for carrying out those requirements lands on hospitals and other providers.

That is, that whole idea that members, your basic consumer of health care, should not get a bill at the end of a surgery or at the end of an ambulance ride from out-of-network providers who they didn't know were out-of-network, who they didn't voluntarily choose.

They thought they were going to an in-network facility, or they were under an emergency and they didn't have a choice. That top of the iceberg, that's the big thing that's making all the waves.

Certainly, that's a great thing for health care members. Consumers shouldn't get these bills and bankrupted by these claims that they didn't freely choose. That's the first part.

Then, like I said, there are the transparency requirements on the bottom.

There are 4 large transparency requirements. The first one is a cost price estimator tool that every payer must have on their website. The second one is the Advanced Explanation of Benefits that we can talk about a little bit later.

The third one is that all plans now must have in-network provider directories. They must have that on a publicly available website. This is a huge change. A lot of states have passed this kind of requirement before, but that only applies to the fully insured.

Now, for the 60% of the population that is covered by a self-insured plan, those self-insured plans are going to have to have those directories.

The fourth, which I'll throw in here, even though it's not considered a part of the No Surprises Act, is basically a data dump. The payers have to put out big spreadsheets that explain all of their pricing as on a provider-to-provider basis, on a hospital-to-hospital basis, like specific items and services for specific hospitals and how much they are paid from payers. They call it machine-readable files.

In terms of the surprise balance billing, what we're finding is plans are turning that over to vendors like Zelis that already think through how to price out-of-network claims.

The key there that payers are probably thinking about is, one, how to meet compliance. Certainly, January 1st, both sides of the aisle, all politicians, HHS, CMS, everybody is saying January 1st is when these requirements absolutely have to be implemented.

Balance billing has to be prohibited after January 1st. Most of that lies on the hospitals to not map balance billing members. The payers' role in that is to figure out how to pay and how much to pay those hospitals and providers for out-of-network claims.

The No Surprises Act has a number of deadlines, certain things that need to be met. A lot of plans are looking to their vendors, again, like Zelis, to take care of that for them.

Two things.

One is to make sure those compliance requirements are met. Make sure that the deadlines are met and the process flows according to what the No Surprises Act says. But also, think more strategically about how to price those out-of-network claims.

If you think about a self-insured business that has self-insured insurance, every time there's a big bill that hits or knocks the benefits plan, that's going to hurt the company in the end. It'll hurt the paychecks and the cost of insurance for those that are self-insured.

Even though the member is now protected, we now have to think through strategically, how do you pay for those out-of-network claims so that they're appropriate for those kinds of things? Transparency requirements.

Again, like our survey showed, payers are scrambling to figure this stuff out. I would suggest 3 things. First of all, the transparency requirements, of course, are all about the data. It's all about pricing data, how much things cost, how much is being paid for by insurers.

The first thing a payer has to do is figure out how much of that data they have in-house and how much of that data they have to find from someplace else with vendors and other solutions. Wherever that data is, they need to make an inventory of it, figure out what they have, what they still need to get.

I'd say the next part is we're talking about an area where health plans aren't in competition with each other. This is all about the data. There's no market edge if you figure out how to get the data better than somebody else.

It's a good opportunity for health plans and payer communities to come together and talk about the different solutions they're thinking through. Talk to their vendors, their partners, the entities that have this data.

Figure out what solutions they're coming up with, whether it be internal, or if they're contracting it out, or finding a solution vendor to do it. It's a good opportunity to brainstorm because these requirements are very new.

It's a whole different way of thinking about pricing. To pull all that stuff together is going to be a bit of a reach.

Do you have any additional recommendations for payers struggling to find solutions for cost transparency requirements?

August 20, CMS came out with some guidance, some FAQs that are giving health plans a bit of a break.

Right now, as I said, the balance billing prohibition, figuring out how to pay providers for those out-of-network claims, that all is definitely taking part January 1. CMS has given a little bit more slack to some of the transparency requirements in response to this industry nervousness.

For one thing, the machine-readable file, these data dumps, that doesn't have to be put out until July 1 for the health plans. There's this expectation that by January 1, plans will have their provider directories up and running, but we're still waiting for regulations. CMS has said if plans make a good faith try at making sure those directories are up-to-date and are accurate, then that's okay.

The big lift was going to be the Advanced Explanation of Benefits, which has been pushed out indefinitely. It’s going to take a lot more industry discussion with government to figure out how that's going to play out. That's definitely a breath of relief for health plans. The price estimator tool is also not required to be up and running. Plans are not required to have that up and running until January 1 of 2023.

We have a little bit more space to figure it out. Again, I think it is going to take a lot of discussions within and outside the industry.

I'd also say that I think this is a good opportunity. Certainly, the regulators saw this coming and opened this up as an opportunity. We're going to have to start looking outside the health care industry for help with some of these requirements.

Basically, if you think about the transparency requirements, the idea is to give consumers as much information about how much things are going to cost before we go ordering services, or scheduling procedures, or whatever it may be.

The idea is to bring back capitalism to health care, where market forces can take place because consumers know what they're buying. Consumers will choose things based on price, and quality, and what we're seeing elsewhere.

What we may see is transparency because it's pushing the health care industry to free the data. We're going to see the same thing that we've seen in the travel industry, the banking industry, the hotel industry, the Uber and Lyft industry, where once this data is free, there's going to be a lot of non-health care entities coming in.

A lot of smart people are figuring out how to use that data and how to put that data in front of consumers more easily. Starting those conversations with non-health care industry entities to say, "How can we do this? How can we make this data usable to consumers?" is another step we're going to have to think through.

How can payers obtain the data needed for the Advanced Explanation of Benefits requirements?

This was unlike any kind of transparency requirement we had heard of.

I had been in the halls of Congress listening to all the conversations about the surprise balance billing ideas over the last 2 or 3 years and didn't hear anything about this Advance Explanation of Benefits, which is, like I said, extremely disruptive, but can completely change the way hospitals think about pricing and the way payers think about paying for those claims.

It's probably the biggest transaction since the HIPAA rules put up requirements for health plans to start moving to electronic claims and electronic payments.

The Advanced Explanation of Benefits requires that every time a consumer schedules a health care procedure, item, or service, every hospital, provider, even your family physician, has to shoot a good faith estimate of what the cost of that scheduled appointment or health care service would be to the payer.

Before this, you had payers who would set up a cost comparison tool, where they had some internal data that said, "If you go to this provider, this is how much it would cost." You saw some of the health plans moving into that area.

This is going to require all health plans to move into that area, but also to base those estimates on good faith estimates from the provider itself.

Think about you, as a consumer: you see a new car, a television commercial, and the commercial says it's $32,000. What you're going to do is you're going to pick up the phone if you want that car.

You call the local dealers and say, "Well, I saw that this car is worth $32,000. What is the price for you all? What do you have on your lot?" Of course, the dealer is going to say, "Oh, we only have one that's $36,000 because it's got a better stereo."

This is what the Advanced Explanation is trying to do for consumers. This idea that if I ask a particular hospital or doctor how much this is going to cost, then I expect a good faith estimate of how much it will be.

The trick there, though, is that there isn't yet that communication about an estimate between a health plan provider and a hospital, or a doctor to the payer. That doesn't exist right now. That's never been a requirement. The way that health plan claims work is you go get your procedure or service, and then the doctor figures out what it is, and then they all get together.

You might get 3 or 4 different claims sent to the health insurer, and then 3 or 4 months later, the member gets something that says, "Yeah, we think you owe this, but hold off for a couple more weeks."

Now, this says that before you go to your appointment, you'll have an estimate in hand. In fact, just like you can request from many car dealers, you can request 3 or 4 different estimates from 3 or 4 different facilities and expect to have that sent to you before you even schedule an appointment. Big lift.

This is one of the reasons that CMS has postponed till more conversations happen, because in order for that first transaction to happen, for the provider to send a good faith estimate to the health plan, you have to think about, "Let's standardize something that's digital. Let's do this the same way we do claims. Let's standardize a particular kind of electronic format that can be used, and then it needs to be sent through EDI. What kind of connectivity needs to be put through there?"

Otherwise, you're going to have lots of plans setting up lots of different things, and lots of providers using different ways of getting that estimate to them. The answer to the question is we don't know how they can get that information now.

Certainly, payers should be actively involved in conversations with groups like WEDI, HL7, X12. These are all standards groups that think through how to take data and move it between health plan and to the health care entities from one to the other.

Is there anything else you would like to add?

Right now, we're heads down. Payers, providers, we're heads down trying to figure out how to be compliant over the next 2-3 years with these elements.

The other thing that we need to think about as an industry, and certainly, payers specifically, is once you've checked the box and you meet the compliance dates, how can you be strategic about implementing these issues?

How can you actually use all these requirements that the government is burdening you with as an opportunity? There are a number of opportunities for payers to think about.

First of all, think about how you can get your member communications—the plan’s information to the member. How you can get that information, electronic, digitalized, and move it to your members' phones?

The Advanced Explanation of Benefits is a good example. That's a lot of trees, cost, and postage if, suddenly, you're going up the amount of paper that a member's going to get.

Strategically, plans should be thinking about digitalizing that communication. Not just digitalizing it, but here's an opportunity for plans to tell their story. Again, the Advanced Explanation of Benefits is a good example.

You're sending information to a member before they go to their scheduled appointment or before they schedule a specific appointment. Never before have payers had that opportunity to get in front of a member and say, "Hey, don't go to this out-of-network facility for this. Go across the street. The quality is better, the cost is better, everybody will save time."

Or, "Hey, look, we see you're using this procedure. Maybe pick the silver plan next year and you'll save so much money because you'll have better benefits." Or, "That's an interesting procedure. Have you looked at this procedure?"

It's the first opportunity for health plans to get in front of members, tell their story. A great opportunity to work on that member communications, attach a strategy behind it.

The other element, of course, is this is all pricing transparency. Plans shouldn't just be putting out this information. They should also be gathering up the information that other entities are putting out, that other payers are getting out there, learning from what the pricing is, what the hospitals are saying that they're paying.

A great strategic opportunity, if we can pull our heads up a little bit while we're checking the compliance boxes and think long-term.