On January 1, 2022, a bipartisan effort to reduce unexpected medical bills implemented the No Accidents Act. Despite the significance of the legislation — reducing unexpected bills, one of the biggest drivers of U.S. healthcare bankruptcies — the bill’s true meaning has been overlooked.
On the one hand, this legislation has the potential to revolutionize America’s healthcare economy. On the other hand, it remains unfamiliar to those most affected—namely, patients, physicians, and ambulatory surgery centers.
The No Accidents Act (NSA) is a Trojan horse for healthcare legislation (in a good way). In addition to minimizing unexpected bills after a trip to the emergency room, it also minimizes unexpected bills for non-emergency situations. Most surprisingly, it requires price transparency for insurance and out-of-pocket health care. The requirement will have far more impact on Americans and healthcare providers than price transparency rules imposed on hospitals and insurers in 2021 and 2022, respectively.
In many ways, the Act has more impact on providers’ day-to-day work than the Affordable Care Act. However, many consumers and suppliers are unaware of the bill’s consequences.
Surprise bill in an emergency
The most talked about aspect of the law is for patients who are being treated in emergency situations. While insurance may cover most of their “in-network” care, unexpected bills may come from other providers in the facility, such as a radiologist who is reading X-rays, who are not in the patient’s insurance network. Depending on the patient’s coverage, these medical expenses from out-of-network (OON) providers may not be covered at all, or may only be partially covered, requiring the patient to bear a larger share of the cost.
With the implementation of the NSA, the radiologist’s bill in the above scenario will be converted to a lower in-network rate and paid for by the patient’s insurance.
Unexpected bills for non-emergency situations
The NSA also protects patients from unexpected bills when they receive care from an out-of-network provider at an in-network facility during non-emergency care. Consider when a woman delivers a baby at an in-network hospital through her in-network OBGYN.
If the anesthesiologist placing the epidural is not out of network, this can result in unexpected bills not being covered by the patient’s in-network benefits. With the NSA, this unexpected bill will be paid at the in-network rate.
New price transparency requirements for covered patients
The most transformative aspect of the NSA is the requirement for price transparency in both cases. The first is when the patient chooses to receive care from an OON provider on a non-emergency basis (think plastic surgeons for breast reconstruction after mastectomy). In the second case, the patient pays for uninsured care (think uninsured or choose not to use insurance—ie, out-of-pocket) or for procedures that are not covered, such as cosmetic surgery.
If a patient chooses to receive non-urgent care from an OON provider, they must agree to and accept a higher OON fee from an OON doctor. But consent is not enough. Patients must be told what their out-of-pocket costs are.
This is not the same as what doctors charge. Providers must now provide patients with an estimate of their out-of-pocket costs after determining how much the patient paid for the deductible and out-of-pocket maximums and coinsurance for that calendar year. By understanding the actual out-of-pocket costs of the care provided by that physician, patients can now make informed financial decisions. Before the NSA, this level of transparency was not guaranteed.
New price transparency requirements for uninsured or self-paying patients
Patients who are uninsured or out-of-pocket must now also receive an upfront estimate of care, known as a good faith estimate (GFE). GFE is required even for those patients who have insurance but choose not to use it. Why doesn’t someone use their insurance? In many cases, paying out-of-pocket rates is lower than insurance rates, especially if consumers have not yet met their deductibles.
Similar to the estimates that physicians must provide for patients seeking out-of-network (OON) care, bona fide estimates must include expected costs associated with the procedure. But unlike the OON estimate, there is no cost-sharing calculation because patients do not have or use their insurance.
The GFE is also more significantly different from the OON estimate. Providers must include all costs reasonably expected in the patient’s care. This includes not only the physician, but also anesthesia and operating room fees and any ancillary expenses such as, but not limited to, laboratory work and radiology or pathology studies.
This GFE must also contain a disclaimer that the patient has the right to dispute any charges above the $400 GFE. To avoid these controversies, physicians are encouraged to ensure accurate pricing up front and to overestimate additional costs when appropriate. Not only does this increase transparency by ensuring that possible charges match actual charges, but it also addresses the NSA’s original purpose of avoiding unexpected bills after the procedure.
Also, while minimizing unexpected bills may make headlines, incorporating price transparency into the day-to-day work of healthcare organizations is the real news. Before the NSA, health care was immune to fundamental market forces, such as up-front costs seen in other sectors of the economy. But now, just as consumers can determine the cost of a car or home before buying, it’s possible to know their cost before receiving care thanks to a transformative Congressional bill.
Photo: Cat View, Getty Images
