Make sure your business is on board
by Robin Gelburd Ms. Gelburd is the founding President of FAIR Health, a national, independent nonprofit with the mission of bringing transparency to medical and dental costs and insurance information. Connect with her by e-mail: [email protected]
The national health care cost transparency movement is well underway. A proactive approach to helping employers and their workforce board the transparency train can help brokers and other advisers differentiate their practice and ensure that their business will move forward as new consumer-focused health care cost transparency initiatives unfold.
We are already seeing the ripple effect of the cost transparency transformation. Health care utilization is changing, with more consumers deciding to receive care at alternative facilities such as urgent care centers, retail health clinics and ambulatory surgery centers. More employers are selecting narrow and tiered networks and high-deductible plans that require employees to roll up their sleeves to try and understand the implications of these new plan designs.
Membership in high-deductible plans increased from 6.1 million in 2006 to over 15 million in 2013, with membership continuing to rise. Similarly, Accountable Care Organizations (ACOs) and evolving models offering out-of-network reimbursement are causing consumers to ask questions and plan diligently for their health care services.
New York law advances transparency, consumer protection
And more payers and providers voluntarily, or, in some instances, are required by law to post their price lists publicly to help consumers understand out-of-network reimbursement. One example of the next wave of transparency legislation is a New York State law offering health care consumers across the State some of the most comprehensive health care cost transparency and consumer protections in the nation. FAIR Health data will feature prominently in the new law’s assistance for consumers, businesses and practices that work with individuals.
The law gives insurers, HMOs, managed care organizations, student health plans and similar organizations a number of new responsibilities, including complying with guidelines for dispute resolution, fulfilling disclosure requirements, explaining how they calculate out-of-network reimbursement levels and making that cost-calculation explanation available to plan members both in writing and through a website.
The statute also provides protections for consumers in the case of emergency services and “surprise bills,”—balance bills for out-of-network services which an insured reasonably believed were in-network. The law to reduce surprises, ironically, goes into effect the day before April Fools’ Day.
These New York State reforms were developed with a broad consortium of stakeholders including health plans, hospitals, physicians, consumer advocacy groups and government officials, among others. There was general consensus that unexpected liabilities for balance bills for those consumers who made every effort to stay in-network or found themselves in emergency rooms receiving out-of-network services required a fair and reasonable solution.
New York took bold action and other states are beginning to explore similar or related types of legislation. The National Conference of State Legislatures has published a report which describes several recent as well as longer-standing cost transparency actions taken over the past two decades. The report can be found here.
Key consumer protections embedded in the New York law include:
- Health plans must provide publicly available up-to-date lists of physicians, hospitals and other providers belonging to their networks;
- Hospitals, medical practices, and diagnostic and treatment centers must disclose which providers are out-of-network when they are making a referral;
- Insured consumers who receive a surprise bill from an out-of-network provider will be responsible for paying only the amount required by their plans’ in-network rules;
- Patients’ out-of-pocket costs for emergency care will be limited to the amount required under their plans’ in-network rules;
- Health plans must disclose how their out-of-network payments compare to a standard reference point–i.e. FAIR Health’s “80th percentile benchmark”—and provide estimates of members’ costs for common procedures;
- An independent dispute resolution process for emergency services and surprise bills may also use the FAIR Health 80th percentile benchmark as a reference point, among other factors.
As consumers seek to manage their health care costs and understand the ins and outs of their high-deductible health plans, narrow and tiered networks, and cost-sharing formulas, it is critical that the information available to them keep pace with these changing plan designs and reimbursement models.
The pursuit of cost transparency is successful only if it benefits the most essential participant in the marketplace—the individual consumer. Studies show that employees often pay little attention to their benefits until they are facing a crisis situation. Employees cannot afford to wait until they are in the emergency room to become fully acquainted with their benefits.
Changing the embedded status-quo
Employers are faced with the task of helping their workforce move away from decades of learned behavior where employees did not shoulder sizable portions of the cost of their care. Now that employees have more cost-sharing responsibility, brokers and other advisers can bring added value to their services by helping clients educate their workforce to become more engaged health care consumers. Understanding new benefit paradigms and adapting long-established practices often require repetition and reinforcement.
Advisers are ill-advised to take a one-and-done approach to helping employers improve their workforces’ health care literacy; they must recognize and address the challenge of a rapidly changing health care and insurance environment. One simple way advisers can differentiate their practices is by hosting recurring client webinars and onsite meetings designed to boost employee health care literacy.
A welcome topic would be to help employees understand their personal role in some of the new consumer protections, such as the New York State law. Turnkey marketing collateral, online and mobile health care cost estimators and literacy tools can be customized to feature the broker or employer clients’ brand.
Resources are available from FAIR Health, an independent, nonprofit organization at www.fairhealth.org, state insurance departments and other government agencies. The disclosures and explanations required by the next wave of transparency laws will undoubtedly have a profound impact on our health care system. You can enhance your role in the marketplace by carving out a cost transparency and health care literacy thought leadership position.
Do not let the transparency train leave the station without you on board. Brokers and other health advisers who lead the way toward helping their clients’ workforce develop a better understanding about new insurance plan designs and individuals’ out-of-pocket costs will offer their clients added value and earn recognition for exceptional service. ♦