American Hospital Association Urges CMS To Extend Enforcement Discretion For No Surprises Act

CMS urged to extend enforcement discretion for No Surprises Act requirement  | AHA News

Source: Healthcare Finance, by Jeff Lagasse

The American Hospital Association has urged the Centers for Medicare and Medicaid Services to extend enforcement discretion for the No Surprises Act regulatory requirement that healthcare providers exchange certain information to create a good faith estimate for uninsured and self-pay patients – until the agency identifies, and providers can implement, a standard, automated way to exchange the information.

“In the interim final rule implementing this policy, CMS notes that it is exercising enforcement discretion until Jan. 1, 2023, as it may take time for providers and facilities to ‘develop systems and processes for receiving and providing the required information,’” AHA wrote. “We agree that developing and implementing the solution will take time and cannot be achieved efficiently without additional guidance from CMS that identifies a standard technical solution that can be implemented by all providers.”

One of the main concerns from the AHA is that there are currently no methods for unaffiliated providers to share or receive good faith estimates with a convening provider or facility in an automated manner. To share this information, billing systems would need to be able to request and transmit billing rates, discounts and other necessary information for the good faith estimates between providers/facilities.

This is not something that practice management systems can generally do, said the AHA, since billing information is traditionally sent to health insurers and clearinghouses, not other providers.

“Due to the lack of currently available automated solutions, this process would require a significant manual effort by providers, which would undoubtedly result in the convening provider being unable to meet the short statutory timeframes for delivering good faith estimates to the patients and could also lead to inadvertent errors,” the AHA wrote.

AHA requested an extension in enforcement discretion until a technical solution has been found and implemented.

WHAT’S THE IMPACT

Without an automated standard, the AHA said, providers would need to determine individually how to transmit the information. That in turn could lead to variance throughout the industry, especially considering differences in size and technical sophistication among co-providers and facilities. Navigating a non-standardized process, the AHA contended, would increase administrative burden on providers.

To help work toward a standard solution, The AHA said it’s partnering with the American Medical Association, the Medical Group Management Association and HL7 to create a workgroup to discuss potential technical solutions for sharing and receiving critical information among providers. The group will consist of providers and vendors with knowledge of provider systems.

THE LARGER TREND

In December 2021, the American Hospital Association, American Medical Association and other provider organizations sued the Department of Health and Human Services and other federal agencies over implementation of the No Surprise Act. The groups are not against the legislation, they said in the lawsuit filed in federal court but take issue with how HHS implemented a dispute resolution process in the bill.

The No Surprises Act prevented 2 million surprise bills for the commercially insured, according to a survey by AHIP and the Blue Cross Blue Shield Association released in May. The analysis further showed that, if the trend continues, more than 12 million surprise bills would be avoided in 2022.

American Hospital Association Urges CMS To Extend Enforcement Discretion For No Surprises Act

3.2% payment increase is not enough, American Hospital Association says |  Healthcare Finance NewsSource: Healthcare Finance, by Jeff Lagasse

The American Hospital Association has urged the Centers for Medicare and Medicaid Services to extend enforcement discretion for the No Surprises Act regulatory requirement that healthcare providers exchange certain information to create a good faith estimate for uninsured and self-pay patients – until the agency identifies, and providers can implement, a standard, automated way to exchange the information.

“In the interim final rule implementing this policy, CMS notes that it is exercising enforcement discretion until Jan. 1, 2023, as it may take time for providers and facilities to ‘develop systems and processes for receiving and providing the required information,’” AHA wrote. “We agree that developing and implementing the solution will take time and cannot be achieved efficiently without additional guidance from CMS that identifies a standard technical solution that can be implemented by all providers.”

One of the main concerns from the AHA is that there are currently no methods for unaffiliated providers to share or receive good faith estimates with a convening provider or facility in an automated manner. To share this information, billing systems would need to be able to request and transmit billing rates, discounts and other necessary information for the good faith estimates between providers/facilities.

This is not something that practice management systems can generally do, said the AHA, since billing information is traditionally sent to health insurers and clearinghouses, not other providers.

“Due to the lack of currently available automated solutions, this process would require a significant manual effort by providers, which would undoubtedly result in the convening provider being unable to meet the short statutory timeframes for delivering good faith estimates to the patients and could also lead to inadvertent errors,” the AHA wrote.

AHA requested an extension in enforcement discretion until a technical solution has been found and implemented.

WHAT’S THE IMPACT

Without an automated standard, the AHA said, providers would need to determine individually how to transmit the information. That in turn could lead to variance throughout the industry, especially considering differences in size and technical sophistication among co-providers and facilities. Navigating a non-standardized process, the AHA contended, would increase administrative burden on providers.

To help work toward a standard solution, The AHA said it’s partnering with the American Medical Association, the Medical Group Management Association and HL7 to create a workgroup to discuss potential technical solutions for sharing and receiving critical information among providers. The group will consist of providers and vendors with knowledge of provider systems.

THE LARGER TREND

In December 2021, the American Hospital Association, American Medical Association and other provider organizations sued the Department of Health and Human Services and other federal agencies over implementation of the No Surprise Act. The groups are not against the legislation, they said in the lawsuit filed in federal court but take issue with how HHS implemented a dispute resolution process in the bill.

The No Surprises Act prevented 2 million surprise bills for the commercially insured, according to a survey by AHIP and the Blue Cross Blue Shield Association released in May. The analysis further showed that, if the trend continues, more than 12 million surprise bills would be avoided in 2022.

Health Insurers Will Issue Roughly $1 Billion In Rebates This Year

Health insurers will pay $1 billion in rebates this year: analysis

Source: Healthcare Finance, by Jeff Lagasse

Due to the Medical Loss Ratio provision of the Affordable Care Act, health insurers will issue roughly $1 billion in rebates to customers in 2022, according to a new analysis from the Kaiser Family Foundation.

The MLR provision limits the amount of premium income that insurers can keep for administration, marketing and profits. Insurers that fail to meet the applicable MLR threshold are required to pay back excess profits or margins in the form of rebates to their enrollees.

The estimated $1 billion in rebates is across all commercial markets, but the expected rebate amounts vary by market segment. Insurers in the individual market estimate they will issue $603 million in rebates, small group market insurers will issue $275 million in rebates, and large group market insurers will issue $168 million in rebates later this year.

These rebates are greater than those issued in most prior years, but fall short of the record-high rebate amounts of $2.5 billion in 2020 and $2 billion in 2021. In most years, changes in the rebate totals have been driven primarily by fluctuations in the individual market. Rebates in the small group and large group market are generally smaller and more consistent over time.

Individual market insurers in 2021 had higher loss ratios, meaning they were likely less profitable, on average, than they had been in recent years. The average individual market loss ratio – without adjusting for quality improvement expenses or taxes – was 88%, meaning these insurers spent an average of 88% of their premium income in the form of health claims in 2021.

But rebates issued in 2022 are based on a three-year average of insurers’ experience in 2021, 2020 and 2019. Some insurers experiencing relatively high loss ratios in 2021 nonetheless expect to owe rebates this year, because those rebates reflect their more profitable stretches in the 2020 and 2019 plan years.

They’re the first rebates in years that do not include 2018 in their three-year averages. This is significant, because 2018 was an especially profitable year for many insurers. Many of them overshot their premiums amid uncertainty about ACA policymaking in 2017, including whether the law would be repealed and replaced, whether cost-sharing payments would be made, or whether the individual market would be enforced by the federal government.

The large profits and overhead seen in 2018 are part of why individual market rebates issued in 2019, 2020 and 2021 were so large, according to KFF.

WHAT’S THE IMPACT?

In the individual and small group markets, insurers have to spend at least 80% of their premium income on healthcare claims and quality improvement efforts, leaving the remaining 20% for administration, marketing expenses and profit. The MLR threshold is higher for large group insurers, which must spend at least 85% of their premium income on healthcare claims.

The effects of the pandemic continue, KFF found. The rebates for this year include experience from 2020 and 2021, and in 2020 there were several factors driving down health spending and utilization. Hospitals and providers canceled elective care early in the pandemic and during spikes in COVID-19 cases to free up hospital capacity, preserve supplies and mitigate the spread of the virus. Many consumers also chose to forego routine care in 2020 due to social distancing requirements or similar concerns.

Since insurers had already set their 2020 premiums ahead of the pandemic, many turned out to be overpriced relative to the amount of care their enrollees were using. Some insurers offered premium holidays, and many temporarily waived certain out-of-pocket costs, which drove down their rebates.

Rebates or rebate notices are mailed out by the end of September, and the federal government will post a summary of the total amount owed by each issuer in each state later in the year.

THE LARGER TREND

KFF predicts that the higher loss ratios seen in 2021 may foreshadow steeper premium increases in 2023, since some insurers will likely aim for lower loss ratios to regain higher margins. Plus, higher rates of inflation in the rest of the economy may translate to increases in prices demanded by providers, which would drive premiums even higher.

Insurers are currently setting premiums for 2023 and have the difficult task of predicting the continued impact of the pandemic, amid further uncertainty about the future of American Rescue Plan Act subsidies in the individual market.

According to KFF, insurers setting premiums for the 2023 plan year will need to factor in several pandemic-related considerations, including but not limited to: potential pent-up demand for care, the negative impact of foregone care on the health of some enrollees, the rate of future COVID-19 hospitalizations and the need for more booster shots.

Private insurers may need to pick up the costs of vaccines and boosters next year.

As of April 5, the Department of Health and Human Services no longer adjudicates claims submitted for vaccine administration due to a lack of funds, according to the Health Resources & Services Administration.

If insurers overshoot their premiums amid that uncertainty, they’ll again be required to issue rebates to enrollees under the ACA, according to KFF.

LGBT Employees and Benefits: Impact of Marriage Equality

A year after the Supreme Court’s historic marriage equality ruling (Obergefell v. Hodges, June 2015), Lincoln Financial surveyed LGBT employees about their benefits. Since the ruling, 28% of the LGBT community overall, and 35% of those married or in a domestic partnership have reevaluated their workplace benefits, enrolled in a new benefit, or increased their contribution to an existing benefit. Thirty percent are making changes to their workplace benefits as a result of the ruling. But 50% are still unaware of how the ruling affects their benefits. Thirty-eight percent of LGBT employees who are married or in a domestic partnership are not aware how the marriage equality ruling affects their workplace benefits. The study also finds the following:

  • 14% of LGBT employees who are married or in a domestic partnership have enrolled in a new non-medical insurance plan.
  • 11% of LGBT employees have enrolled in a new health insurance plan.
  • 7% LGBT employees have made changes to their retirement plan by enrolling in a new plan or increasing contributions.
  • 51% of LGBT employees would like to speak with someone about their benefits.

For more information, visit http://newsroom.lfg.com/mood-of-america-special-report

The Impact of Health Reform in California

A survey by The California HealthCare Foundation (CHCF) finds improvements in access to care in California. The uninsured rate is at a new low, and fewer Californians are delaying or skipping necessary medical care. The number of Californians under 65 without insurance dropped 12%, falling from 16% of the population in 2013 to 14% in 2014. Uninsured rates declined notably among people living below 138% of poverty line and among African Americans. The share of the California population 18 to 64 enrolled in Medi-Cal rose 52%. The proportion of uninsured Californians reporting cost as the reason for lacking coverage fell from 53% to 43%, though lack of affordability remains the most common reason cited for going without insurance.

Last Updated 06/29/2022

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