Background on the No-Surprises Act:
The No-Surprises Act provides protections against surprise medical bills, expenditures on health services inadvertently received out of network.
The scope of the law is extremely limited because the definition of a surprise medical bill is narrow, and many medically necessary out-of-pocket procedures remain uncovered or subject to higher cost-sharing terms even when the procedures are not offered inside a network.
The No-Surprises Act does not cover many medically necessary health care procedures that may not be offered or covered by a narrow-network health care plan.
Surprise medical bills usually occur when patients receive care from an out-of-network emergency room or are admitted to a hospital after the emergency room visit.
Other surprise medical bills include services performed by out-of-network providers who work at in-network hospitals.
The No-Surprises Act pertains to ambulance for air transportation but not for transportation for ambulance by ground transportation.
An article by the Kaiser Family Foundation describes the provisions of the No-Surprise Act. The No-Surprises Act does the following:
- Requires insurance companies cover out-of-network claims for surprise medical bills and apply in-network cost sharing arrangements.
- Limits charges on surprise medical bills to the in-network cost sharing amount.
- Creates negotiations and independent dispute resolution between the insurance firm and the provider on the remaining bill for the surprise medical bill.
- Allows some providers to request patients waive their rights under the No Surprises Law.
- Requires both the insurance plan and the provider to identify health expenditures that are surprise bills.
The law does not guarantee the automatic elimination of all surprise medical bills. If a medical bill is not flagged as a surprise medical bill the patient must apply for protections under the act. Go here for a CNBC discussion of the appeals process.
The No-Surprises Act pertains both to PPOs that require higher cost sharing for out-of-network health services and to HMOs that do not provide any compensation for out-of-network services.
Analysis of limits of Narrow-Network Health Plans:
The passage of the Affordable Care Act (ACA) created a trend towards the greater use of narrow-provider health plans, especially on the plans sold on state-exchange markets. One study found narrow plan substantially reduced both insurance premiums and federal subsidies on insurance premiums.
However, the use of narrow network plans instead of broad network plans creates financial risks and impedes access to health care
- One study published in JAMA found that 15 percent of plans were deficient in at least one specialty.
- One study published by the Journal of Oncology found that narrow-network health plans were more than twice as likely to exclude doctors affiliated with the top cancer hospitals.
- One study published in Health Affairs found that narrow health plans had substantially fewer mental health providers and that the lack of coverage would likely lead to insufficient coverage for mental health conditions.
The growth of narrow-network plans may increase disparity between access to health care in rural versus urban or suburban areas.
Potential policy solutions to issues cause by narrow-provider networks:
Narrow-network health plans reduce costs and premiums but also result in reduced access to health care when the narrow network does not provide a service or higher costs when the patient obtains services outside of her network. This paper discusses policies that would expand access to service to out-of-network medically necessary health care procedures when the services are not available in a narrow network, while retaining the cost efficiencies achieved by the narrow network plans.
This article by the USC-Brookings Schaefer Initiative for Health Policy looks at two policy initiatives – the regulation of the adequacy of provider networks and dispute resolution measures similar to those in the No-Surprises Act.
A network adequacy regulation might be based on maximum travel time to distance to see a specialist, the ratio of provider to enrollees, or the maximum appointment wait time.
These regulations are insufficient for highly specialized health care procedures. Many surgeries and procedure are best done by doctors with narrow skills including cardiac surgeons and doctors, pediatric surgeons, and eye surgeons. It would be extremely difficult to create a regulatory procedure requiring inclusion of narrow specialists in each network, especially in small markets when few specialists were available.
Network adequacy regulation does not facilitate access to top cancer hospitals which are often excluded from narrow-network plans.
The Brookings paper favors a dispute resolutions procedure to allow for access to outside specialists for out-of-network services when medically necessary. The dispute resolution process for medically necessary out-of-network procedures would be patterned after the dispute resolution procedures established in the No Surprises Act.
Both the proposed network adequacy regulations and the expanded dispute resolution procedures would increase costs for narrow network health plans.
An alternative or additional approach used to facilitate access to medically necessary out-of-network health care procedures involves a federal subsidy for medically necessary out-of-network procedures.
The new subsidy would increase demand for less expensive narrow health care plan and this shift toward narrow plans would reduce federal subsidies on ACA state exchange health insurance thereby offsetting part of the cost of the subsidy. The new subsidy could involve reinsurance compensating insurance companies for high-cost health care cases.
Narrow-network health plans do a good job in reducing health expenditures, premiums, and federal subsidies on premiums; however, these plans deny many households access to medically necessary out-of-network health. Expansion of the dispute resolutions measures created by the No-Surprise-Act and new federal subsidies for medically necessary out-of-network health procedures could mitigate some of the problems associated with narrow-network health plans and expand their use.