Episode Overview:

The No Surprise Act went into effect on January 1, 2022. It protects patients from out-of-network surprise bills. Health care organizations must comply with these regulations for emergency care, non-emergency care from out-of-network providers at in-network facilities, and air ambulance services from out-of-network providers.

In this episode of Value-Based Care Insights, Daniel J. Marino speaks to Shawn Stack of HFMA to share how health care systems can navigate the No Surprise Act.

  • Price transparency initiatives originally rolled out from a perspective of providers being transparent on their actual charges
  • One of the biggest drivers of higher costs is the structure of the Medicare fee schedule and reimbursement
  • As the No Surprise Act and Price Transparency Act is implemented, it will be important to give feedback to legislators and CMS on policies


Daniel J. Marino
Daniel J. Marino, Managing Partner, Lumina Health Partners


Shawn Stack Headshot-1
Shawn Stack, Healthcare Policy Director, HFMA


Daniel J. Marino: Welcome to another episode of Value-Based Care Insights. I'm your host Daniel Marino. I'm excited about today's discussion. In our episode today, we're going to discuss the truths, the myths, and implications of the No Surprise Act. The No Surprise Act as well as price transparency has created some challenges for providers, as we all know. But it's also been some really nice advocacy for patients. Along with that, though, providers are challenged with what information they need to give to patients, how they get the information, particularly if a set of providers are not in network. And health care providers need to identify the true costs of a service. And that can really vary as we all know, right? Charge masters are very different. And what we get reimbursed from payers is very different. What the patients pay, of course, is also included in the equation. So, the No Surprise Act was really geared towards engaging patients in the discussion of what they should be paying and what's reasonable to pay. So, they're not hit with large surprise bills after a particular service has occurred. Joining me today in our discussion with Shawn Stack. Shawn is health care policy director at HFMA. Specifically, he's the association's director of perspective and analysis and is responsible for developing policy and positions on this topic, and many others for HFMA. I am very excited to have Shawn here with us. Shawn, welcome to the program.

Shawn Stack: Thanks, Dan. It's nice to be here.

Daniel J. Marino: As I work with health care organizations around the country, specifically those that are providing some type of financial counseling to patients, or even as simple as patients who are checking in for particular services, health care providers, physician offices, hospitals are really struggling with what's the right level of information to give to patients.  Also, what they can give to patients that would really allow them to comply under the No Surprise Act. I think that there's also confusion on how price transparency comes into play. So maybe we can start there. Can you shed a little bit of light on maybe the differences, or the commonalities between the No Surprise Act and price transparency?

Shawn Stack: That's a great question, Dan. And both kind of go hand in hand, but don't really address the same thing. In my opinion, price transparency initiatives as they originally rolled out - we saw those roll out from a perspective of providers being transparent on their actual charges and how much health care costs in relation to health plan and payor negotiated reimbursement. Or as you just said, the charge master, the actual list, I call it the price tag of each procedure or item that a hospital or provider charges. But let's face it, when consumers negotiate compensation packages with their employers, almost all employers are negotiating based on health care costs being wrapped into that package or reimbursement to the employees. Yeah, they do go hand in hand and the end consumer, and the inpatient is actually paying for those costs.  That price tag that the provider or hospital charges is just a negotiated rate. But you're right, it is very confusing for a user or a patient to look at a charge master and say, how much am I going to be charged for my service? Because there's just so many charges. Right?

Daniel J. Marino: Well, and what a hospital or a physician group lists as their charges isn't normally what they get paid. There's a negotiated allowable amount that comes back between the insurance carrier and the provider. And nobody really knows what that goal is. The goal of The Transparency Act was to at least be able to allow patients an ability to have a good idea of what those reimbursable charges are. So frankly, they can shop around. I think the big challenge is what actually goes into that, because I think there's different negotiated rates based on different arrangements between the hospitals and the providers. And also the benefit plans come into play as well.

Shawn Stack: And Medicare comes into play as well. One of the biggest drivers of higher costs is the way the Medicare fee schedule, and the Medicare reimbursement is structured. If you don't have higher costs on items or higher price tags, I would call it on items, hospitals, take a bath or lose a lot of money on patients who hit outlier payments - meaning patients who stay three months in the hospital.  Medicare patients - they have to build those higher price tags to recoup their losses. So the whole system is structured for higher price tags is what I'm saying. So it's just not the providers being greedy, or the hospitals being greedy. It's just the way the system has been structured for years.

Daniel J. Marino: Absolutely. So then when you think about the No Surprise Act, the goal of it was really to establish some type of patient protection, that really allows increased transparency - for patients to have a pretty good idea of what their costs are going to be so they're not hit with any of these large, large bills. But I think also, just given the structure and how you described the financial arrangements between the hospitals and the payers, it's a real challenge for hospitals to really identify accurately what the financial responsibility would be.

Shawn Stack: This is a great area to talk about, I think, because what folks hear about a lot, I think it's essentialism. But you know, legislators saying, well, I can take my car and I can get my car fixed and I know what I'm going to pay. Well, the human body is not like a car, your body is not like mine, we both have comorbidities, we both have maybe high blood pressure or some other underlying factors. So once you open a patient up or do a procedure on a patient, sometimes you don't know exactly where that's going to go, and what type of additional costs are going to be calculated during that surgery or that procedure. I think that has been the angst of providers not wanting or not being able to provide a good faith estimate or quote upfront, because you never know what's going to happen on that operating table or during that procedure or during that clinic evaluation.

Daniel J. Marino: You are absolutely right. And I think that's one of the biggest challenges. And probably the biggest complaints from providers, particularly physicians, is you really don't know until you're taking care of the patient. And then, you know, coupled on top of that, patients are the employees and the employers structure around their plans. Frankly, what the employees can afford, whether they have a high deductible health plan, or they have a coinsurance or copay also figures into that equation. So when you think about all of this, on the surface, it sounds like the No Surprise Act is pretty easy. But when you really dive into it, it's difficult to come up with what that right amount is.

Shawn Stack: I agree, Dan, it's not easy. But I think it's a good step to take. I mean, I'm definitely from the provider side. I mean, I've worked at a hospital for several years. But this is where we need to go. And this is where the legacy hospitals need to go to stay competitive in the market and to really continue to offer the excellent services that we offer in the US. I know that I agree that a lot of folks are complaining about a lot of providers and a lot of hospitals are complaining about how the No Surprise Act has been written. But I think this is a starting point. I think we're going to see clarifications come out over the next two years, I think this act is going to expand. So essentially, the No Surprise Act really has outlined provisions to actually help patients understand the cost of health care in more complex areas where, you know, the patient comes in for services and they're out of network. The hospital needs to or the convening partner, the provider or the facility that is responsible for delivering those services needs, let the patient know at this point, you're no longer receiving emergency care. This is what you're going to be responsible for because the clinician taking care of you at that hospital is out-of-network with your insurance. While it's still very difficult to navigate, and I think providers, CMS, and the payers are having a hard time setting up these initial workflows to get this information out to the patient, I think it's needed. I think that transparency is really needed. So patients understand what they're on the hook for.

Daniel J. Marino: I agree, I think the more that providers can have these conversations, relevant conversations with patients provide a level of transparency and build trust - you have a better opportunity to work through some of the financial challenges that would occur. And let's face it, you know, there's many health care procedures that are quite expensive. I think by sharing this information by being transparent in the information, certainly it's going to help the collectability and frankly, just help the relationship between the patient and the provider. So, when we think about where providers should go with this, it's really reengineering the whole financial counseling process, right? And the communication with patients? When you've worked with hospitals, or clinics or physician practices, are there a couple of key things that come to mind as a starting point as to where these providers can begin to either get the information or have conversations with patients?

Shawn Stack: I think what we've seen in health care, either good or bad, good and bad, depending on how you look at it is the financial conversation.  And the clinical conversations between the actual caretakers have been historically pretty separate - especially when you're in a hospital seeing the doctors there take care of you and you do not worry about the cost of care, because their main goal is to solve the problem that you're having medically.  And then we always kind of cleaned up the finances on the back end, you know, billed the insurance, got the denials from the insurance, if they got denied, appeal.  Some denials required patient involvement as the patient was billed for anything the employers insurance wouldn't cover, or their insurance wouldn't cover. And now I think this act is kind of bringing those worlds more together. So it's kind of like a more holistic approach to care. One of the things I always said when I when I worked for an academic medical center for years and I was in finance over patient accounting, was I never wanted anyone who went to our heart center to get a $200,000 bill because their insurance denied it.  Can you imagine sending someone with heart issues, right, and it happens a lot? Right, they're just going to come back when they get a half a million dollar bill? I think talking to a patient explaining, you know, those dynamics between medical necessity and how things can get misconstrued at times, between clinical care and finance, I think bringing that patient into that conversation and letting them know what's going on upfront. The challenge here with a lot of providers right now with this rolling out is not interrupting that health care flow - and how to talk about finances. And I think finding that sweet spot of balance, being respectful to the patient, and talking to them when they're in pain, maybe, you know, from an illness, finding that sweet spot, to let them know and to reach out and engage with them and show them that you care about their finances as well. You know, while they're sitting there in a hospital gown vulnerable from pain. Talking about finances is another very painful thing for most people to talk about.

Daniel J. Marino: In the revenue cycle, we often talk about the two parts of the revenue cycle, there's the patient experience, whereas if you have a health care issue, at that point in time, the most important thing for you is resolving that issue. The bill, the financial responsibility becomes secondary. But then when your health care issue is resolved, hopefully, you move into what we call the consumer experience where your health care issue that you had sort of takes a backseat. And the most important thing is that bill, to your point, the more you can bring those two worlds together into a single conversation, I think is really the goal of the No Surprise Act to allow patients and providers to work through that. So not only are we taking care of the patient's clinical needs, but we're also addressing the financial needs as we're thinking about how to create that optimal experience for the patient.

Shawn Stack: Yeah, you are, you hit the nail on the head there Dan. HFMA does a class at one of the academic centers around the country with new chief medical officers. And one of the things I always say to them, because you know, they don't know, they don't usually typically know how revenue cycle works at a hospital, and they at least need to have a high-level view of how it works, I always kind of tell them revenue cycle scheduling, for registration are the first people your patients talk to when they come into the hospital. So having a conversation with those folks as a clinician is very important. And guess what? They're the last person they should talk to.

Daniel J. Marino: And I say building on that - they make or break the relationship. Right?

Shawn Stack: The scary thing about this, Dan, is a lot of folks don't realize for a patient who need follow up care or continuum of care, that last flavor, or that last impression, sets the tone of whether they're going to come out and seek follow up care from that facility. And that's scary.

Daniel J. Marino: And it really is - or even referring to some of their own family members to that provider. So yeah, you're absolutely right.

Shawn Stack: I think this holistic approach, although sometimes hard to swallow.  The No Surprises Act, I don't think many providers or many hospitals would tell you, you know, this is just the wrong way to go. I don't think that's what they're saying. I think they're just trying to wrap their heads around "how do we continue to balance this, you know, the health care piece with the finance piece and make it holistic?"

Daniel J. Marino: You know, you're absolutely right. On the surface, all health care providers feel like this is a good thing. That's good for the patient. Having transparency and communication certainly is a good thing for the health care community. Like with anything else, every time you have to change processes, or put new activities or initiatives in place to comply with some regulations, there's some challenges around it. The No Surprise Act went into place January 1 of this year 2022. Do you see some additional changes coming from the government later in 2022, or maybe even forthcoming in 2023?

Shawn Stack: I certainly hope so. One of the big pieces so far, and I don't want to say they've been left out of this piece - and they are just as responsible as providers for surprise billing or out-of-network billing, if you whatever you want to call it, or, or any type of denial rejection are the payers.  They are not even close to being held accountable so far in this process. And there's reasons for that. There's extensive electronic and communication bills that need to be done for the providers to get the information to the payers and the payers to move that information upfront to the patient themselves. So, there is some build there going on. But I definitely want to see more direction and more provisions come out and clarifications come out for payers, in maintaining their websites accurately for who's in network, who's out of network, things like that communication that they need to provide to the hospitals. So they know in enough time to inform the patients. So that piece will be coming out, hopefully late 2022 or early 2023.

Daniel J. Marino: I think that would be great. I think if the Payers can start to share some of that level of information, I think it would really help consumers to understand, like you said, who's in the network who's out-of-network, and that level of transparency to sort of inform the financial responsibilities of the patient is a necessary ingredient.

Shawn Stack: Yeah, and, you know, and that communication back to the employer who is actually paying for a lot of this. I mean, they're paying for the payers to manage their patients or their employees. So I think we're going to see the employer get a lot more involved in health care in the next five years. One of the one of the things that the No Surprise Act already has done that has been, you know, it has made providers and especially ED physicians, do cartwheels across the room is they have come out and said, no longer can a payer deny an ED visit for medical necessity because the patient came in with severe chest pains and then found out that it wasn't a heart attack. You know, that was the right place for that patient to go. And you don't know that they weren't actually having a heart attack until you've done the diagnostic services to figure that out.

Daniel J. Marino: You're absolutely right. And I agree with you. I think that was a big change. It was, I think, extremely beneficial for patients because it did create a lot of anxiety from that.  I had a good friend of mine who didn't have very good coverage from his insurance and this was probably three or four years ago, ended up going to the emergency department and it was one of either the ER physician or a specialist who did a work up and he ended up getting three or four different bills. And it just kept on going and going and going. And frankly, the plans denied it. And he was really responsible for it. So I agree with you. I think having that level of transparency and making sure that everything is included in that service bill is really important.

Shawn Stack: Yeah, absolutely. I think well, we'll also see more transparency, not just on out of network services, but on in network services, too, coming from CMS and no surprises in the future, maybe a year or two years from now.  Folks will be on the hook for good faith estimates for all scheduled services which will be nice.

Daniel J. Marino: That'll be nice. Yeah, I agree with that. So, Shawn, this is great, great conversation, I think, really good insights. Clearly, there's a lot of opportunities for hospitals and providers. But there's also quite a few challenges. If you were to provide any final advice for our listeners, a couple of key things that you might want to share.

Shawn Stack: For providers, I say, embrace the changes, try to work through them. They're not perfect, but we'll get there. I think giving feedback to your legislators and giving feedback to CMS on policies is very important because they are willing to listen. And then for patients, I mean, I think that they, you know, you know, your community providers, whether it's an academic medical center, or critical access hospital or rural hospital, have conversations with them, ask for these things. Try to understand and have honest conversations about your health care as holistic. We'd no one want you at a hospital or definitely your provider does not want you walking away with a bill that you can afford and that you're, you know, financially challenged for the next 10 years to pay off. That's not what hospitals and community providers want.

Daniel J. Marino: Right? Absolutely. So one of the goals of our podcasts here is always to share information. And obviously sharing this information is great. Is there somewhere that providers have additional information that they may need? Or they want? Or maybe some suggestions in terms of how they can begin to implement some of these processes? Are there any reference sites, anything through HFMA, that you might be able to recommend?

Shawn Stack: Yes, I have a lot of resources out on hfma.org that members can access, we have a forum that is out there a community forum where providers throw back and forth ideas that they have on how to operationalize these, these new regulations and these new provisions and, and how they're handling these and talking with their, you know, their providers at their hospitals. And then honestly, CMS has a great website that stood up, if you just Google CMS, No Surprise Act, there's a lot of provider resources out there under the CMS website that you can that providers can also access. I'll be doing a premium facilitated learning for our members later this spring. And it's basically like an online college class for folks to really explore no surprises, how to adopt these into your workflows for your patients, and your providers at your facility. So those are filling up fairly quickly. But we'll probably really be repeating those as new regulations and new provisions come out throughout the year. So folks can tap into those as well. And then of course, ha as well, has a lot of resources out there on their website.

Daniel J. Marino: While your program sounds great. And, you know, if you can't want to share some of that information with me, I'll pass it on to some of our listeners. And sure, I have a lot of respect and admiration for HFMA, you all have done a great job of creating wonderful information for providers and really helping our providers along with many of these initiatives similar to the No Surprise Act. Well, Shawn, thanks for your time today. This was wonderful. I really appreciate it and love to have you back sometime down the road, especially if we see some additional changes that are coming down the pike or even if you've identified some opportunities that you know, maybe providers have figured out how to implement some of these things and some success stories. We always love to share these with our audience. Great. Thank you, Dan. And we're a big fan of yours here at HFMA. So nice talking with you.

Daniel J. Marino: Great. Appreciate it, Shawn, thank you. So as we wrap up today, Shawn did a nice job of talking about the differences between the no surprise that price transparency, and at the end of the day, this is a good thing for providers. I think the challenge continues to be like anything else. How do you change the process to meet not only the requirements of the regulation, but making sure that we're really creating value for our patients? I think if we do this the right way, and we really re-engineer the whole financial counseling process. The opportunities to share transparent information with patients will increase dramatically, not to mention our collection opportunities as well. And as Shawn said, There's no reason to reinvent the wheel. There's a lot of great information that is out there that certainly uses HFMA as a resource such as hfma.org and even Lumina Health Partners. Luminahp.com is another great resource as well. Until next time, I want to thank everyone for listening. I'm Daniel Marino, have a great day.

About Value-Based Care Insights Podcast

Value-Based Care Insights is a podcast that explores how to optimize the performance of programs to meet the demands of an increasingly value-based care payment environment. Hosted by Daniel J. Marino, the VBCI podcast highlights recognized experts in the field and within Lumina Health Partners.

Daniel J. Marino

Podcast episode by Daniel J. Marino

Daniel specializes in shaping strategic initiatives for health care organizations and senior health care leaders in key areas that include population health management, clinical integration, physician alignment, and health information technology.