Getting the Word Out: New Provider and Insurer Disclosures Promise to Curb Surprise Medical Bills for Older Adults

For too long, insured consumers remained in the dark about how much a scheduled health procedure would actually cost them. Consumers could attempt to get a general estimate of how much their health insurer would potentially cover for the type of procedure they expected to have, or they could use online tools to examine average costs charged for similar procedures. However, even with these limited options, medical billing has been historically opaque; in fact, details, such as exactly what services were involved and who was involved in their care, typically only became available after the procedure was over. Importantly, people often did not know whether those providing care were in their health insurance plan's contracted network of providers, or were outside the network, requiring them to be responsible for higher charges.

This lack of information often resulted in consumers learning only after the procedure was over that a provider involved in their care was out-of-network, resulting in bills totaling hundreds or thousands of dollars that put consumers in a financial bind they never saw coming.

A new federal law known as the No Surprises Act, effective as of January 1, 2022, bans surprise medical billing in emergency and certain non-emergency situations, shielding consumers from potentially large out-of-network bills they don’t expect. Integral to these bans are the law’s lesser-known provisions requiring providers and insurers to provide consumers with key cost information in advance of their care.

The Information at Hand

In addition to the law’s main provisions, the No Surprises Act ensures that consumers now receive advance information about the cost, services, and network status of providers in a planned episode of care. This occurs in two important ways:

Provider Disclosure – Prior to a person receiving services, an out-of-network facility or provider must provide the consumer with advance notice that makes clear the network status of the facility and all providers that will be involved in the care. The notice must also contain a good-faith estimate of the amount that an out-of-network provider or facility will charge for services as well as information on any applicable utilization management requirements. Further, providers must give the insured consumer written notice (unless the consumer chooses to receive it electronically) at least three days before the date of the appointment or three hours in advance of same-day services.

Insurer advanced explanation of benefits (EOB) – An insured consumer who schedules a health care service in advance will also receive an advanced explanation of benefits (EOB) from their health insurer. The first part of the advanced EOB should detail the network status of the provider or facility, the provider’s good faith estimate of the charges for the items or services, and information on any applicable utilization management requirements. The second part must include estimates of expected consumer cost sharing and the amount the insurer will pay as well as the amount that the consumer has already paid toward deductibles or out-of-pocket maximums. Due to the complexity of implementing this provision for insured consumers, federal officials have delayed enforcement of the advanced EOB until after future rulemaking.

Making Disclosures Meaningful

These new advance information disclosures required by the No Surprises Act will provide important and timely cost transparency and give consumers a greater say in the plan for their care. Yet, like many aspects of the new No Surprises Act, implementation and effective enforcement will be key to ensuring that consumers receive the full benefit of these new disclosure requirements. Unfortunately, we know that information alone is not enough to ensure consumers are protected from high health care costs. For example, surveys have shown that insurer communication to consumers is notoriously opaque, either failing to reach consumers or being buried in dense documents. And consumers often find it challenging to use cost information to make choices which lower their costs.

As such, transforming these two new disclosures into protections against surprise medical bills will require strong efforts by all stakeholders, including providers and insurers responsible for sharing information, as well as policymakers monitoring implementation. These efforts are timely as policymakers have begun integrating the No Surprises Act with state surprise billing laws and navigating the complexities of enforcing these aligned policies. Stakeholders must craft disclosures in ways that best protect and inform consumers, which includes disclosing cost and care information to consumers in a clear, concise, and accessible manner. Given the challenges many consumers face in affording the cost of care, disclosures relating to costs that are shared with consumers should also stand out from the deluge of other information they receive and include a clear way for a consumer to ask questions.

Avoiding surprise medical bills involves having accurate and timely information in order to make a choice. The No Surprise Act’s provider and insurer disclosures intend to deliver that information to consumers and, if implemented well, help make surprise medical bills a thing of the past.