Thought Leadership

No surprises: unless your health system isn’t ready

Lauren Homrich
By Lauren Homrich
posted Jan 6, 2022

We’ve entered the year of the No Surprises Act, and we’re finding that payors will have the upper hand. Perhaps it’s because they haven’t spent the last two years scrambling to address a rapidly moving pandemic.  

Regardless, health systems now must navigate the unknowns of the No Surprises process in an increasingly hostile environment — and in the midst of an insurance industry working overtime to re-brand itself as the leaders in patient advocacy. The result of this payor strategy is, at least in part, the No Surprises Act — a heavy blow to the group heralded as healthcare heroes not so long ago. 

While the sentiment of the No Surprises Act is one we can all support in concept, the consequences of Part II of the legislation could be considerable for your provider organization if you don’t prepare. With an arbitration process heavily skewed in favor of those with deep pockets and far more tolerance for risk, health systems cannot simply wait to see what the future holds.

While there are still unknowns around operationalizing No Surprises, we know one thing for sure: health plans have been emboldened to continue aggressive behaviors that prey on the risk-averse nature of their provider adversaries. A prime example? BlueCross BlueShield of North Carolina’s contract ultimatums that cited No Surprises in outreach provider groups across the state late last year.

With the No Surprises Act in full effect, evidence points to payor behaviors growing increasingly hostile, making the fear some have expressed about a “race to the bottom pricing” completely possible. And on the heels of health systems’ financial hardships from COVID-19 — and payors setting record profits —there has, arguably, never been a more important time to meticulously prepare for your next contract negotiation. A strong contract for your organization is the single best defense against health insurers’ underhanded tactics toward the “race to the bottom” via No Surprises. 

Here are three ways in which you c­­­an begin to set your organization up for a successful negotiation with the No Surprises Act now in place. 

Think logistics

While the law went into effect in early 2022, we know the claims process will take time. Use these upcoming months to make decisions about your risk/reward benefit before the inevitable denials hit. Know your revenue cycle inside and out. Identify the service lines that put you at high risk of denials and ensure your coding teams are following payor medical policy strictly. Trust that payors will know these weaknesses. Batch claims strategically. Model your arbitration success rate. Critically evaluate standard boilerplate agreements to ensure provider-friendly language. Your payor opponent is certain to calculate your strengths and limitations. You should, too. 

Educate frontline staff members

The No Surprises Act has been marketed to consumers, so frontline staff must be prepared to answer questions about patient impact and the process for resolving disputed claims. Small steps can make big impact: use this opportunity to brand your organization’s transparency by offering patient billing consultations, clarity on patient financial responsibility in the case of an out-of-network scenario, and even posting in-office signage, collateral, and website content that directs patients to relevant resources. 

Educating your staff members that interact with patients regularly — clinicians, administrators, and customer service representatives — on the main points of the No Surprises Act and how it affects your business, will be imperative for patient satisfaction. Your system’s understanding of how to handle a dispute if a patient asks is vital to remaining competitive in your marketplace and bolstering public negotiating leverage with the payor. Winning public opinion is key when your next negotiation moves into the limelight. 

(Re) establish goodwill with the public

While 2020 was a tough year, it was also the year of the healthcare hero. How quickly things have changed. Today, healthcare providers are fighting an uphill PR battle and struggling to set the record straight on skyrocketing cost of care. While payors spin their wheels to redirect from the issue of surging premiums and deductibles for the average American worker, the public finger-pointing on the issue of rising healthcare costs has landed on health systems, hospitals, and providers. Re-establishing trust with the public is critical in 2022. Now is the time to develop a proactive communications strategy that addresses what it takes for providers to provide exceptional care, as well as how your organization needs insurers to pay sustainable rates to maintain that level of care and invest in the resources needed for the community. Developing a communications strategy that educates key stakeholders such as brokers and employers now could set the foundation for your next public negotiation, in which your opponent will surely claim it is protecting their members from greedy hospitals and doctors.

In 2022 and beyond, we can expect payor behavior to become more aggressive in the wake of the No Surprises Act, using strong-arm tactics to try to slash payment rates and shrink provider networks in the name of “protecting patients from rising healthcare costs.” As the healthcare landscape changes, it’s important you have a partner that is astute to the challenges your organization faces around your next high-stakes negotiation. Plan to prepare before it’s too late.