Latest / Becker’s Healthcare Podcast / No Surprises Act Costs, Price Transparency, and the Latest Payer Policy Shifts with Jakob Emerson

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No Surprises Act Costs, Price Transparency, and the Latest Payer Policy Shifts with Jakob Emerson · Becker’s Healthcare Podcast

• 0:02
  - GLP ones, Medicare Advantage Headwinds, a Medicaid landscape
• 0:06
  - that looks different
• 0:07
  - every quarter.
• 0:09
  - Their leadership right now means making durable decisions
• 0:11
  - in an environment that keeps moving, and the
• 0:13
  - organizations pulling ahead are the ones that stopped
• 0:16
  - waiting for stability
• 0:18
  - before acting. Becker's fifth annual fall payer issues
• 0:21
  - roundtable convenes more than 500
• 0:24
  - executive level attendees
• 0:25
  - and 70 plus speakers November second and third
• 0:28
  - at the Swiss Hotel Chicago.
• 0:30
  - Two days of senior level dialogue on affordability,
• 0:33
  - benefit design, value based care, and the strategies
• 0:36
  - shaping how care gets financed
• 0:39
  - and delivered. Featuring a celebrity keynote from pro
• 0:39
  - football hall of famer, Emmitt Smith. The
• 0:50
  - This is Scott Becker with the Beckers Health
• 0:53
  - Care Podcast.
• 0:55
  - Thrilled today to visit with Jacob Emerson who
• 0:57
  - covers the payer arena at Beckers HealthCare.
• 1:00
  - Jacob's brilliant. I I and I always learn
• 1:02
  - something talking to Jacob, and I always figure
• 1:05
  - as an interviewer,
• 1:07
  - if I learn something, that's usually an indication
• 1:10
  - their audience is likely to learn something and
• 1:11
  - find it interesting too. And and Jacob's one
• 1:13
  - of the best at this. Jacob,
• 1:16
  - with that sort of pressure and stress, let
• 1:18
  - me ask you to take it away and
• 1:20
  - tell us what are a couple of stores
• 1:21
  - that you're watching in the payer world currently.
• 1:24
  - Absolutely, Scott. No. I I'm feeling the pressure,
• 1:27
  - apply right now. But, hopefully, yeah, I can
• 1:29
  - I can, help the audience learn something?
• 1:32
  - I think, at least for me, what has
• 1:35
  - stood out this week so far or not,
• 1:37
  - of course, all the way through the week,
• 1:38
  - but there's some interesting new data out from
• 1:40
  - CMS
• 1:41
  - around the no surprises acts,
• 1:44
  - the arbitration process.
• 1:46
  - So, basically, that that dispute process that exists
• 1:49
  - federally,
• 1:50
  - for out of network providers and insurers to
• 1:52
  - argue over how to get paid. Basically, that
• 1:55
  - the cost have exploded
• 1:56
  - just last year alone. And now we're we're
• 1:59
  - seeing the government go on record kind of
• 2:00
  - taking the side of insurers in all of
• 2:02
  - this,
• 2:03
  - in terms of some of what they've been
• 2:04
  - complaining about in some of the recent earnings
• 2:06
  - calls just these last week these last few
• 2:09
  - weeks or so.
• 2:10
  - Talk to us about that. Talk to us
• 2:12
  - about this perspective because Yeah. It does seem
• 2:14
  - like doctor Oz
• 2:16
  - seems to be in the pair camp.
• 2:18
  - That might just be his view of the
• 2:19
  - world. It might be his view that that's
• 2:21
  - the way we should go.
• 2:23
  - I I don't quite
• 2:24
  - but it does seem like you have this
• 2:26
  - perspective of being a little bit pro payer
• 2:29
  - at a time when that was so popular
• 2:30
  - just six months ago.
• 2:32
  - What is the perspective? What what are you
• 2:34
  - seeing in in DC with respect to this?
• 2:36
  - It from the administration, I know that's not
• 2:37
  - the perspective of senate and congress, but but
• 2:40
  - it says something that the hospitals and health
• 2:41
  - systems and doctors
• 2:43
  - are taking a little bit on the on
• 2:44
  - the
• 2:45
  - or or or or getting shot at it
• 2:47
  - a little bit.
• 2:48
  - Yeah. I would I would agree. And I
• 2:49
  - think it seemed like when the administration first
• 2:52
  - came in from from the CMS perspective,
• 2:54
  - there was rhetoric around how,
• 2:57
  - CMS
• 2:58
  - doctor Oz would be a little bit more
• 2:59
  - hard on the insurance industry compared to previous
• 3:02
  - administrations.
• 3:04
  - I I think the conversations were a a
• 3:06
  - lot around Medicare Advantage,
• 3:09
  - And it seemed like there was for a
• 3:10
  - little bit in the first few months, at
• 3:12
  - least rhetorically, but then, you know, we saw
• 3:14
  - the right notice that was pretty favorable for
• 3:16
  - the industry.
• 3:17
  - And now we're seeing stuff like this where
• 3:19
  - CMS does seem to be largely siding with,
• 3:22
  - insurers when it comes to the no surprises
• 3:24
  - act. But I'd also say, you know, at
• 3:27
  - least as of right now, the the data
• 3:28
  - seems to be backing that up.
• 3:31
  - But I also think, Scott, you know, I'm
• 3:33
  - I'm saying this on a podcast listened to
• 3:35
  - by a lot of providers.
• 3:36
  - There's also the argument that, I've seen made
• 3:39
  - and I think is very valid that
• 3:41
  - these high payments under this IDR system
• 3:44
  - just reflects,
• 3:45
  - underpayments
• 3:46
  - from the insurers from the beginning, and now
• 3:48
  - providers are finally able to fairly get what
• 3:50
  - they should have gotten from the beginning. So
• 3:52
  - let me just detail what some of this
• 3:54
  - new data is and what CMS has said
• 3:55
  - because I really think this is a this
• 3:57
  - is a huge turning point this week,
• 3:59
  - for the no surprises saga that we've been
• 4:01
  - seeing. And so, basically, you know, the the
• 4:04
  - law passed in 2020, it set up that
• 4:06
  - system in 2022,
• 4:08
  - where
• 4:09
  - unexpected bills for out of network emergency care
• 4:11
  - and some other services get routed through a
• 4:14
  - payment, a federal payment dispute system,
• 4:17
  - that is over seen by federal,
• 4:19
  - mediators basically. And so
• 4:22
  - it's it's far the the process has gone
• 4:24
  - awry.
• 4:25
  - Costs are up by billions.
• 4:28
  - They're they're being the the process is being
• 4:30
  - flooded
• 4:31
  - with far more,
• 4:33
  - far more claims than was originally expected. And
• 4:36
  - so
• 4:37
  - last year alone in 2025, CMS just put
• 4:39
  - out this data,
• 4:40
  - yesterday,
• 4:42
  - saying that the the process has reached almost
• 4:45
  - $15,000,000,000
• 4:46
  - in costs in in 2025 alone. That compares
• 4:48
  - to $4,000,000,000
• 4:50
  - in 2024.
• 4:51
  - So the costs are have exploded, and then
• 4:54
  - we're seeing the insurance companies really complain about
• 4:56
  - this now on their earnings calls, which to
• 4:59
  - me, I kind of take that as a
• 5:01
  - basically, it's political rhetoric. They they they're prepping
• 5:04
  - for these calls ahead of time. They know
• 5:06
  - what they wanna say publicly, basically, to the
• 5:07
  - entire industry.
• 5:09
  - And so you've got UnitedHealthcare
• 5:10
  - saying that this entire process is no longer
• 5:12
  - working, that it needs to be reformed,
• 5:15
  - and that it's driving up their commercial costs
• 5:17
  - overall, which then just trickles down to self
• 5:20
  - insured employers, which at the end of the
• 5:22
  - day basically is the payer. They have to
• 5:23
  - pay those claims. They have to pay that
• 5:25
  - money out. You know, it's United that just
• 5:27
  - administers the the employee plan.
• 5:30
  - So that's all going on. And then the
• 5:32
  - government also found that it's it's really only
• 5:34
  - a handful of companies that's,
• 5:35
  - accounting for a good chunk of these disputes
• 5:38
  - overall. So basically,
• 5:40
  - provider groups, physician groups, air ambulance companies,
• 5:43
  - they hire these these medical billing companies,
• 5:46
  - to file these disputes for them. And and
• 5:49
  - and these these companies are the most active
• 5:51
  - filers. And so the insurers are then suing
• 5:54
  - those companies in court basically saying they're defrauding
• 5:57
  - them, they're flooding them with these claims that
• 5:59
  - they're using AI to to,
• 6:02
  - boost in terms of the share quantity.
• 6:04
  - And the courts are largely siding with the
• 6:07
  - the medical billing companies and by extension the
• 6:09
  - providers.
• 6:10
  - They're not siding with the insurance companies.
• 6:12
  - And then, to add on all this, CMS
• 6:14
  - said that while the no surprises act is
• 6:16
  - critical for protecting patients from receiving surprise bills,
• 6:20
  - the system is being gamed to get higher
• 6:22
  - prices and CMS is actively working to clean
• 6:24
  - it up. And that's a spokesperson to the
• 6:25
  - Wall Street Journal yesterday. So it's fascinating all
• 6:28
  - this is going on. The costs are exploding.
• 6:30
  - The insurers are mad. The courts are not
• 6:32
  - siding with the insurers, and the government is
• 6:34
  - saying the insurers are getting gamed. So it's
• 6:36
  - a it's a whole mess. It's a whole
• 6:37
  - debacle.
• 6:39
  - I would expect we'll probably see some some
• 6:41
  - rulemaking, some reforms over the next year or
• 6:43
  - so proposed at least,
• 6:45
  - to try to get a a hold of
• 6:47
  - of this this situation.
• 6:50
  - Well, it it is a lot of be
• 6:51
  - careful what you ask for because the insurance
• 6:53
  - companies certainly were very pro the no surprises
• 6:56
  - act.
• 6:57
  - Exactly. Industry of the IDR stuff has evolved
• 6:59
  - out of that.
• 7:01
  - The courts have been largely sympathetic to
• 7:04
  - the plaintiffs or the people, you know, saying
• 7:06
  - that they were underpaid by the insurers in
• 7:08
  - these disputes.
• 7:09
  - And, of course, this has led the insurers
• 7:11
  - now not like the no surprise act as
• 7:12
  - much as they thought they might to begin
• 7:14
  - with. Certainly, a fascinating sort of turn of
• 7:16
  - events. And I think that's a really, really
• 7:18
  - good point about all this as well, Scott,
• 7:20
  - is that the insurers
• 7:22
  - lobbied for this law.
• 7:23
  - I think they thought this was gonna go
• 7:25
  - way more in their favor. And now that
• 7:26
  - it's not,
• 7:27
  - now they're on the earnings calls complaining about
• 7:30
  - it, calling for it to be changed,
• 7:32
  - back into their favor. But I think that's
• 7:34
  - another interesting tidbit about all of this as
• 7:36
  - well is, they they wanted this process originally,
• 7:39
  - how it's currently set up.
• 7:41
  - So we'll see what happens. But I do
• 7:42
  - think it's also a valid point that
• 7:45
  - self insured employers have to pay off this
• 7:47
  - money,
• 7:48
  - which means higher premiums
• 7:50
  - for, you know, you and me, basically. Yeah.
• 7:52
  - Yeah. Like, a 100%. A 100%. So that's
• 7:55
  - fascinating.
• 7:56
  - Tell us what else you're watching besides the
• 7:58
  - administration being very sympathetic and seems like the
• 8:00
  - payers on some of these issues.
• 8:02
  - Yeah. So then on the other side of
• 8:04
  - things, you've got congress
• 8:06
  - now taking concrete steps to,
• 8:09
  - advance price transparency legislation,
• 8:12
  - basically codify the rules that have already been
• 8:14
  - in place, that were put in place under,
• 8:16
  - president Trump's first term.
• 8:19
  - So we've got these big health care packages
• 8:21
  - that passed or that advanced set of committees
• 8:25
  - this week, yesterday, and then Tuesday.
• 8:28
  - And so
• 8:30
  - expanding and codifying the hospital and payer price
• 8:32
  - transparency rules. But then what I thought was
• 8:35
  - really interesting is that in the,
• 8:37
  - in the senate bill,
• 8:39
  - there's,
• 8:40
  - there's a there's a provision that would basically
• 8:42
  - give
• 8:44
  - commercial plans,
• 8:46
  - so employers
• 8:47
  - and then third party administrators,
• 8:49
  - PBMs,
• 8:50
  - more access to their own claims data. So
• 8:53
  - it's been a it's been an issue for
• 8:55
  - I'd say, I mean, for a while now,
• 8:57
  - and there's been a lot of lawsuits where
• 8:59
  - you'll basically have and this is a real
• 9:01
  - example. You'll basically have a company like Kraft
• 9:02
  - Heinz,
• 9:03
  - who employs tens of thousands of people. They'll
• 9:06
  - sue their third party administrator, which is, a
• 9:09
  - company like Aetna or United,
• 9:11
  - who administers their employee health plan. They want
• 9:13
  - their full claims data. They wanna know, what
• 9:16
  - are they being charged for? How is how
• 9:18
  - is everything being negotiated on their behalf with
• 9:21
  - providers?
• 9:22
  - And payers have been pretty,
• 9:24
  - reluctant to give over that data for obvious
• 9:25
  - reasons. I mean, that's their that's their bread
• 9:27
  - and butter. That's their competitive advantage against other
• 9:30
  - payers.
• 9:31
  - And now the government is coming in and
• 9:33
  - basically saying, you know, if these bills were
• 9:34
  - signed into law, basically saying,
• 9:36
  - employers have legal legal rights to to their
• 9:39
  - claims data,
• 9:41
  - and and reimbursement formulas around around drug prescription
• 9:44
  - drugs as well with with the PBAM side
• 9:46
  - of things. So I think overall, just what
• 9:48
  - it tells us about, you know, the context
• 9:50
  - of what's going on is that, and I've
• 9:52
  - written about this for backers is,
• 9:55
  - the the negotiating power of the of the
• 9:57
  - payers
• 9:58
  - just keeps getting worse over time.
• 10:01
  - You know, now they've had to be the
• 10:03
  - hospitals and the payers have been having to
• 10:05
  - post their prices now for a little bit,
• 10:07
  - and we know that's being used in contract
• 10:09
  - negotiations. And that's why they've gotten so intense
• 10:12
  - over these last few years between hospitals and
• 10:14
  - insurers or one reason for it. But now
• 10:16
  - Congress is signaling,
• 10:18
  - they wanna take it a step further and
• 10:20
  - basically,
• 10:21
  - start to go after the leverage or really
• 10:24
  - the entire infrastructure of how the, you know,
• 10:26
  - the insurer
• 10:27
  - and claims and pricing structure of the health
• 10:29
  - care system is built on. So I think
• 10:31
  - that's really fascinating to to see how this
• 10:34
  - is gonna all shake out as well. But
• 10:36
  - there it's huge health care packages, so,
• 10:38
  - we've got, you know, full analysis going up
• 10:40
  - on the websites today.
• 10:43
  - Jacob, just, fantastic your coverage. I'm constantly trying
• 10:46
  - to work with this IDR thing as there's
• 10:48
  - these companies that have gotten really deeply involved
• 10:50
  - in IDR and trying to understand how this
• 10:52
  - plays through. And hearing your explanation on some
• 10:54
  - of this is really, really helpful. I I
• 10:56
  - wanna thank you as always for joining us
• 10:58
  - on the Becker Becker's Healthcare podcast. Just a
• 11:00
  - pleasure to visit with you. Thank you. Yeah.
• 11:02
  - Thank you, Scott. I appreciate it.