Nearly 60% of insured adults have received a surprise bill on a healthcare service they thought was covered by insurance. And whether care or the provider is in-network, out-of-network or a mix of the two, 1 in 5 of these insured adults find it difficult to pay their deductibles.2 Why is this happening and what is being done about it?
Due in part to narrow provider networks, surprise bills can be the financial result of a patient receiving in-network care by an out-of-network provider, often the bill being the difference between the charged and the allowed amount of a service. These surprise bills can cause undue stress and have detrimental financial effects on the entire household, such as delayed payment on other household expenses, mounting credit card debt, and more. As such, state and federal legislations are responding in kind with laws around surprise bills.
A number of states have enacted comprehensive laws to protect some patients from surprise medical bills, including California, Oregon, Illinois, Florida, New York, New Hampshire, New Jersey, Connecticut and Maryland. Additional states, including Texas, Colorado, New Mexico, and Washington, have passed laws expected to take effect this year. In essence, these laws are meant to protect consumers from surprise bills by limiting providers to the applicable in-network cost, setting a state payment standard, and/or establishing a dispute resolution process.3 Meanwhile, more than a dozen more states have enacted a limited approach to mitigate surprise bills.
Federal action is necessary to address certain aspects of surprise bills for people enrolled in self-funded plans due to the Employee Retirement Income Security Act of 1974, or ERISA. Legislation is expected to be passed in fall of 2019.
Both state and federal initiatives can be summed up as:
- All proposed legislation includes a ban on balance billing patients
- Most legislation is specific to emergency and ancillary providers at this time
- Many of the proposed state and federal bills include stipulations for using usual and customary rates as a basis for negotiation
- Arbitration clauses included in many of the proposed bills is considered favorable to providers
- Indexing against usual and customary rates seems to be included in more of the state initiatives
What can you do?
To help avoid and mitigate the risk of surprise bills, more and more hospitals and clinical laboratories are rethinking the patient experience and investing in tools to help provide pricing transparency on procedures and services, like testing. These tools utilize basic patient demographics (name, birthdate, address, insurance provider, etc.) to validate insurance coverage and eligibility, perform advanced benefit investigation to uncover plan-specific coverage details, assess prior authorization rules, and most importantly provide a patient’s expected out-of-pocket cost. Taking it even further, labs can identify a patient’s propensity and willingness to pay to help assess the need to offer financial assistance. This entire approach, called Patient Access Management, can help clinical labs and providers alike offer the transparency needed to empower a patient to make financial decisions regarding their care – perhaps the patient cannot afford the test so an alternative treatment plan has to be put into place. Patient Access helps to improve the patient experience in that the patient understands exactly what they will owe for the test – and no surprise bills. For a growing molecular lab, this can mean the difference between writing off bad debt and securing expected revenue.
To learn more about Patient Access Management solutions offered by Quadax and how they can help mitigate the risks of surprise bills and more, contact us today!