There will be fewer surprises on April Fools’ Day. The New York State Budget Bill that generally takes effect April 1 and creates new consumer protections includes some of the nation’s most comprehensive health care cost transparency requirements. The law addresses surprise balance bills, emergency care costs, dispute resolution and network adequacy. Several states are monitoring the New York bill and considering similar legislation.

The health care reimbursement system can be difficult to understand. Prior to the implementation of this law, even the most diligent patients who do their homework and check to see if their providers are in-network often face surprise expenses.

A common example is a surprise bill for an out-of-network anesthesia charge when the hospital and surgeon are in-network. It can be difficult for health plan members to plan for these expenses as they often assume all of their care will be in-network if the hospital is in-network.

Brokers should be aware of key provisions of the new law

• Out-of-network reimbursement. Health plans must proactively disclose how their out-of-network payments compare to a reference point — i.e., the “usual, customary cost (UCC)” — identified by the law as the 80th percentile benchmark published by an independent nonprofit. They must provide cost estimates for common procedures in writing and on the Internet. Under some circumstances, plans must offer at least one benefit design linked to a UCC formula for out-of-network services. The new rules apply to policies written or renewed after April 1.

• Surprise bills. Hospitals, medical practices, diagnostic and treatment centers and health plans must disclose when providers are out-of-network or when they are making a referral to an out-of-network provider. When a consumer is taken by surprise by an out-of-network charge from a provider he or she reasonably believed was in-network, the consumer is responsible for the in-network rate and the provider and insurer must negotiate the balance.

• Price lists. Hospitals must identify on their websites all the networks they work with, the hospitals’ physicians who do not participate in these networks and the standard prices they charge for items and services.

• Dispute resolution. An independent dispute resolution process will be established for emergency services and surprise bills. The 80th percentile benchmark will be used as a reference point.

• Emergency services. Insured patients’ out-of-pocket costs for emergency care are limited to the in-network rates.

Tools that can enable brokers to stand out from the crowd by assisting their clients with understanding these new consumer protections include:

• Webinars and lunch and learn sessions for employer clients and their employees to discuss how cost transparency efforts can help them make informed decisions when accessing out-of-network care.

• Customized content and marketing materials about the law and other consumer protections. Savvy brokers can work with a source that develops customized content that looks and feels like it was created by the broker or their client.

• Consumer transparency tools including educational materials, and cost estimation tools available by hyperlink or as a private-label web resource branded for your firm or your clients’ companies.

Consumers and employers will reap the full benefits of these protections only when they are fully engaged and educated. Clients will appreciate the adviser who takes the steps necessary to keep them in the know about these important changes and helps them avoid unwanted surprises on April Fools’ Day and beyond.

More resources relating to the New York State Law can be found at

Gelburd is the founding president of FAIR Health, a national, independent, nonprofit corporation whose mission is to bring transparency to health care costs and health insurance information through comprehensive data products, consumer resources and research support, powered by the nation’s largest collection of medical and dental claims.

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