The No Surprises Act: How healthcare organizations can create a winning strategy

As hospitals and healthcare systems have scrambled to overcome the financial ramifications of the pandemic and a lingering labor shortage, at the same time, they have also had to grapple with new, far-reaching compliance regulations. Passed in late 2020 as part of a COVID-19 relief bill, the No Surprises Act went into effect in January 2022.

The act is intended to protect patients from surprise billing when they use emergency services or self-pay for healthcare. While the spirit of the law is important for controlling patient costs, its enforcement has been onerous for many providers.

“A lot of legislation that happens in healthcare starts off as an experiment with the patient at the center of the equation and compliance regulations that are not fully formed,” said Conrad Coopersmith, chief growth officer at AccuReg. “I think it’s safe to say that the No Surprises Act has been good from afar, but there have been some challenges due to interpretation and governance.”

For example, 82% of group practices said that the requirement to provide a good faith estimate increased their administrative burdens, according to 2022 data from the Medical Group Management Association. In addition, 89% said the requirement to provide an advanced explanation of benefits, once clarified, will increase their administrative burden, and 74% said they lack the technology infrastructure to comply with the co-provider requirements by the deadline.

“The complexities of the No Surprises Act are very high, and so are the administrative burdens for healthcare providers and staff,” said Ryan Howell, vice president, product management at AccuReg.

Despite the complexities, complying with the act is not insurmountable. In this article, Coopersmith and Howell offer updates about changes to the act and solutions for hospitals and providers to create a winning strategy for compliance.

Understand updates to the act

As providers grapple with the requirements of the No Surprises Act, some of the bill’s requirements are being reconsidered or delayed for enforcement. Here’s an update on the four main administrative requirements of the bill:

Good faith estimate. Providers are required to provide a good faith estimate of potential charges to uninsured and self-pay patients before providing care. However, many hospitals rely on co-providers such as physicians or ancillary providers who are not employed by the hospital and data sharing is not available among those various providers. As a result, automatically generating such an estimate is almost impossible.

“The infrastructure isn’t in place for providers to glean the data for co-providers and co-facilities,” Howell said. “Health and Human Services believes providers will need to adopt an integration standard that can support interoperability to deliver good faith estimate data. They’re holding off on enforcement until further rules or standard integrations become available.”

Out of network consent. When insured patients will receive care in an in-network hospital from an out-of-network provider, the facility is required to provide them with an out-of-network consent. Compliance is “very challenging from a data perspective,” Howell said. “First, you have to identify who is an out-of-network provider for a particular health plan, and that requires a very robust solution.”

Independent dispute resolution (IDR). This requirement takes insured patients out of the dispute between an out-of-network provider’s price and their health plan’s payment offer, and instead relies on a third-party arbitration process to determine the plan payment amount. Due to resolution process complexities and the increase in fees charged by third party arbitrators, the enforcement of the rule has been temporarily paused, Howell said.

Claims submitted for IDR rose from 69,000 in the third quarter of 2022 to 110,000 in the fourth quarter of 2022, and to 155,000 in the first quarter of 2023. “Now, more than 12,000 claims are being filed weekly,” Howell said. “Right now, claims are still being issued but dispute resolution is in limbo.”

Advanced explanation of benefits. This requirement is similar to the good faith estimates but is required for health plan members. Health plan issuers need good faith estimate data to notify covered patients of what their expected payment liability will be for a covered service. To comply, providers and health plans must integrate data, followed by health plans delivering the information to members.

“The good faith estimate must be received from the provider and be in the amount a patient will pay before the health plan can provide an advanced explanation of benefits,” Howell said. “Data interchange is needed, and clearly, we’re not there yet.”

CMS has issued a request for information to create a national provider directory, which would potentially help health plans accommodate this requirement.

Combat administrative burdens with technology

While regulatory agencies continue to refine the requirements of the No Surprises Act, the legislation is not going away. For hospitals and healthcare systems, it’s wise to work toward compliance now in order to be prepared for any future regulatory changes.

Technology can help providers overcome compliance hurdles, but the regulations do not easily integrate with existing technologies. “The way the Act was written, burdensome manual processes were built inherently into the process,” Howell said. “Technology, automation and standards are lagging behind in complying with the No Surprises Act.” However, hospitals can incorporate best practices — including technology practices — to help them overcome the challenges of the No Surprises Act. For example, healthcare providers can use automated technology to generate accurate good faith estimates for uninsured or self-pay patients. To do that effectively, they must first make sure their chargemasters are accurate and that any automated system will alert staffers to take action when needed codes are missing. “Staff must also have the ability to create manual estimates when needed,” Coopersmith said.

Another challenge that technology can help tackle for hospitals is managing out-of-network consent for non-emergency services. Hospitals can implement software to handle eligibility verifications, quality assurance edits, and automatically generate estimates with a notice and consent forms. “You can hard code quality assurance edits for physicians that are known to be out of network for your facility, so that staff will be alerted to take action,” Coopersmith said.

Build a winning strategy

To effectively prepare for and comply with the No Surprises Act, Coopersmith and Howell recommend understanding that the process should include both manual and automated tasks.

Indiana’s Goshen Health, which operates 27 facilities in four counties, used a combination of manual and automated processes to develop a No Surprises Act strategy and “continues to make incremental progress toward meeting the spirit of the law and do right by their patients,” Howell said.

Goshen focused on building accurate data sets before implementing technology and automation. For example, the system posted signage across all their patient locations for act disclaimers and redoubled their efforts on quality assurance edits and the ability to identify provider groups that were out of network for certain payers. The team implemented hard edits so staff would be alerted to act and provide out-of-network forms when necessary.

To improve estimation accuracy, Goshen Health leaders refreshed the chargemasters at both the facility level and the physician group level. They also expanded chargemasters to include other areas for which they may not have historically provided automated estimates, such as surgical procedures. While they rolled out incremental improvements from day one, Goshen Health continues to create more complex estimations, such as combined estimates.

“The key is to work toward incremental improvement over time,” Howell said. “As the legislation becomes more specific, and as there’s more market consolidation and coming together to create rules and standards, we expect to see the next level of compliance. Ultimately, the reduction of surprise billing is in everyone’s best interest.”

About AccuReg

AccuReg helps hospitals reduce costs, maximize revenue and increase safety with market-leading patient access solutions and innovative digital patient engagement and price transparency solutions. Its cloud-based integrated platform utilizes automation and intelligence to improve patient experience and revenue capture at the front of the revenue cycle where cost is significantly less. AccuReg prevents denial-causing errors by combining an exception-based workflow, a continuous learning quality assurance rules engine, intelligent eligibility and benefit validation and automated authorization management. AccuReg also enables hospitals to provide patients with accurate out-of-pocket cost estimates integrated with financial assistance qualification and payment processing. www.AccuRegSoftware.com

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