Quick answer
The No Surprises Act and price transparency regulations create a rare regulatory obligation that doubles as an opportunity. Employers must provide good faith cost estimates comparing out-of-pocket expenses across network providers—and because every major payer has now posted contracted fee schedules, employees can truly shop for care for the first time.
Key takeaways
- Employers are fiduciaries of their health benefits plans and must know all costs involved in selecting and managing them
- Evidence of conflicts of interest shows some intermediaries recommend what benefits themselves, not the employer or members
- The looming obligation: good faith estimates comparing out-of-pocket costs across many network providers
- Every major payer has posted contracted fee schedules—the "confidential rates" claim is nullified
It’s rare in the world of healthcare benefits (and benefits generally) that the regulators create an obligation that is an opportunity.
Yet that is exactly what has happened with the passage of the No Surprises Act and the implementation of price transparency regulations. To date, the compliance obligations for employers of these combined regulations have focused on the fiduciary obligation of knowing the actual fees charged and received by benefits consultants and brokers, as well as the administrative and other cost structures associated with the management of the health benefits plan.
In other words, employers, who are the fiduciaries of their health benefits plan, must know all the costs that are involved in selecting and managing their plan and must be prudent stewards in making decisions related to those costs. That, by the way, is an opportunity for employers because there has been significant evidence of conflicts of interest that encourage certain intermediaries to make recommendations that are in the intermediaries’ best interests, but not necessarily in the best interest of the employer or plan members.
What obligation is coming for employers?
What is looming, however, is an obligation that will require more work, but also presents a unique opportunity for employers to spearhead the reform of the healthcare market.
The obligation is to provide employees (and covered dependents) with a good faith estimate of the costs of care they will incur. This obligation is also an obligation for providers from whom the plan member will receive care, with a big difference: Providers are only obligated to create a good faith estimate for the care they (and other providers expected to be involved in the care of the plan member) will deliver. Employers have an obligation to create a good faith estimate that compares the estimated out-of-pocket expense for the employee across many providers in the network from whom the patient could get care. And therein lies the single biggest opportunity to fundamentally change the healthcare market.
The intent of the legislators, in a bipartisan effort, was to bring transparency to healthcare, once and for all. No more bogus voluntary efforts. No more hoping for the best despite the overwhelming evidence that this hope was futile. It is now the law, and all employers should welcome it with open arms.
Employers have an obligation to create a good faith estimate that compares the estimated out-of-pocket expense for the employee across many providers in the network from whom the patient could get care.
Why is this an opportunity, not just a burden?
The body of regulations has already had an effect. Every major payer has posted their actual contracted fee schedules on their respective websites. After years of claiming that these rates were confidential, that they couldn’t be shared, that they were protected intellectual property, the gig is up. The claims are nullified and, while difficult to manage, the rates are in plain sight and can be used to inform employers and plan members.
Converting this information – which is fully public – into a highly relevant and actionable tool that empowers employees to truly shop for care for the first time in their lifetime will take a little more time, but companies like Handl Health have been poised to do just that. So don’t look a gift horse in the mouth and take it for what it is – a real gift cloaked in an obligation.
Frequently asked questions
What obligations do the No Surprises Act and transparency rules create for employers?
As plan fiduciaries, employers must know the actual fees charged by consultants and brokers, understand administrative cost structures, and provide employees with good faith estimates of care costs across network providers.
How do employer estimates differ from provider estimates?
Providers only estimate the care they will deliver. Employers must produce estimates comparing out-of-pocket expenses across many network providers—a far broader, more powerful comparison.
Why is this obligation also an opportunity?
It exposes conflicts of interest among intermediaries and, for the first time, gives employees the tools to truly shop for care—a lever employers can use to spearhead healthcare market reform.
Are payer negotiated rates still confidential?
No. Every major payer has posted actual contracted fee schedules on their websites. Years of claims that rates were confidential intellectual property are nullified—the rates are in plain sight.
How can employers act on this public rate data?
By converting it into relevant, actionable shopping tools for employees—work that companies like Handl Health are purpose-built to do.
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