Navigating the No Surprises Act and Changing Patient Financing Legislation: Webinar Recap

The Patient Financial Crisis

America’s debt crisis is driven by a simple reality: Half of U.S. adults don’t have the cash to cover an unexpected $500 health care bill. According to a Kaiser Family Foundation (KFF) poll conducted in 2023, 41% of those surveyed — which translates to more than 100 million adults — reported that they currently had a debt due to medical or dental bills.

In early 2023, the Consumer Financial Protection Bureau (CFPB) released a report further exploring medical billing and collection practices in the United States. Some key findings from that report include:

Medical bills are often incurred through unexpected and emergency events, are subject to unclear pricing, and involve complicated insurance or charity care coverage and pricing rules.

Medical bills placed on credit reports can result in reduced access to credit, increased risk of bankruptcy, avoidance of medical care, and difficulty securing employment.

COVID-19 has made the situation worse: Both uninsured and insured patients incurred substantial costs to cover COVID-19 related services, including testing and hospitalization.

High interest “solutions” exacerbate an already difficult situation

As Americans are overwhelmed with medical bills, patient financing has become a popular option for many. However, experts say that medical credit cards can add to the growing health care debt problem. An investigation by Kaiser Health News (KHN) and NPR shows that millions of people are paying interest on these plans, on top of what they owe for medical or dental care. Worse still, some medical credit cards are misleading, advertising “no interest” periods ranging from six to 24 months; however, the cards instead offer deferred interest offers, where interest accrues and is charged retroactively if the full balance has not been paid by the end of the promotional period. Even with lower rates than a traditional credit card, this interest can add hundreds of dollars to medical bills and ratchet up financial strains when patients are most vulnerable, deepening inequalities.

Patient-Centered Regulatory and Legislative Changes

In order to combat the patient financial crisis, patient-centered legislation has been proposed and enacted both federally and in different states.

One wide-spread legislation change is the No Surprises Act, which became effective January 1, 2023, and protects people covered under group and individual health plans from receiving surprise medical bills when they receive most emergency services, non-emergency services from out-of-network providers at in-network facilities, and services from out-of-network air ambulance service providers.

The No Surprises Act contains several key elements that medical facilities must comply with to avoid enforcement penalties:

They must provide a good-faith estimate of services and costs to uninsured or self-paying patients who request such an estimate.

They must accommodate an independent dispute resolution process to determine payments between out-of-network providers and health plans.

They must accommodate a patient-provider dispute resolution process to determine payments between uninsured or self-paying patients and healthcare providers.

They must provide a way to appeal certain health plan decisions for insured patients.

Another example is The Strengthening Consumer Protections and Medical Debt Transparency Act (S5150), which, if enacted, would put in place standard practices to make sure that health care entities communicate with consumers about any debt that is owed and cap the annual interest rate growth for medical debt. The legislation also directs the U.S. Department of Health and Human Services (HHS) to create a public database to collect information from health care entities about their debt collection practices.

These bills reinforce the trends we’ve been seeing in the patient billing space for the last two years as traditional practices come under scrutiny and the medical debt burden becomes unbearable for millions of families. We should expect that these legislative trends will continue and that providers will need to be prepared.

Providers need fully compliant, patient-friendly solutions

If providers are looking to get ahead of future regulations and trends with patient financing as their tool, they should look for the following in the solution they choose:

Protocols in place to ensure that consumers are treated fairly, and providers aren’t overburdened by risk

Features ALL the appropriate compliance and regulatory mechanisms in place to protect consumers and providers alike

Programs that do not report to credit agencies, are always 0.00% APR for patients (no deferred interest!), and offer compassionate, income-based payment options and flexible terms

Consumer-focused options can help providers maintain strong collections and patient satisfaction in a fast changing regulatory and compliance environment

Now is the time for providers to get ahead of future regulations and trends with compliant patient financing strategies.