In 2020, Congress passed the No Surprises Act to protect patients from exorbitant medical bills that have left Americans tens of thousands of dollars in debt. The law was enacted to lower costs for patients who received treatment from out-of-network doctors during a medical emergency. These emergency room visits often put people at risk for so-called surprise bills, where insurance companies only pay a portion of the costly medical care.
The No Surprises Act, one of the biggest health reforms since Obamacare, appears to have worked in one important way: Patients have reported fewer catastrophic bills. Although hard data is scarce, Insurance Industry Survey It found that consumers avoided about 10 million surprise bills in the first nine months of 2023. Think Tank Report It also suggests that they are paying less for care people receive in other medical situations covered by the law, such as emergency department visits and air ambulance transport.
But a cumbersome government system for resolving payment disputes between doctors and insurers now threatens to undermine the law’s promise, according to interviews with industry officials, recent data analyses and government documents.
One possible outcome is that insurance premiums would rise for everyone.
Another issue is the lack of doctors who can treat rural residents.
Doctors said insurers are gaming the system to reduce payments, impose stricter medical practices and remove doctors from their insurance networks.
“I’m looking for polite words to describe the experience, but it’s just chaotic and inefficient,” said Dr. Andrea Brault, president of the Emergency Department Practice Management Association, a trade group for physicians. “It’s a costly, lengthy process.”
But insurers have accused large physician groups, some owned by private equity investors, of manipulating the process to extract higher payments. A “small but significant number of bad actors” are flooding the health system with lawsuits “as a means to maximize revenue,” said Kelly Parsons, a spokeswoman for the Blue Cross Blue Shield Association. “If this trend continues, we will likely see unnecessary increases in health care costs.”
Officials at the Centers for Medicare and Medicaid Services said the increase in disputes is a byproduct of the law’s success.
“The No Surprises Act protects millions of patients from surprise medical bills when they experience an emergency or receive care from an out-of-network provider at an in-network facility,” said Jeff Wu, deputy director for policy at the CMS Center for Consumer Information and Insurance Oversight. “The astonishing volume of challenges filed since the act’s surprise billing protections went into effect is a testament to the need for this legislation.”
For decades, private insurance customers have had to worry about receiving high bills if they saw an out-of-network doctor, who typically charged higher fees. This was especially true if they had to go to an emergency room, where they had little choice in which doctor or hospital they were treated by. The No Surprises Act sought to solve this problem by protecting emergency room patients and charging them substantially the same fees as if they had been treated by an in-network doctor or hospital.
The law fundamentally changed the face of billing disputes: “Before no surprises, it was doctor vs. doctor and the patient was in the middle. Now it’s just doctor vs. insurance company,” said Zach Cooper, a professor of public health and economics at Yale University whose research helped shape the law.
By law, out-of-network doctors and hospitals send bills to insurers, which then respond with their own offers — about 80% of insurance claims are settled this way, according to the Office of Insurance Commissioner. Survey conducted by insurance industry association.
But if the two sides can’t agree on something, they’ll go through a system created by CMS and other government agencies in which an independent arbitrator will consider a variety of factors and determine the final payment amount. This arbitration is what drives many of the law’s unintended consequences.
Initially, the government estimated there would be about 17,000 lawsuits per year. But data released in June showed that about 680,000 cases were filed in 2023. The result is a huge backlog of cases, delaying payments to doctors, hospitals and medical organizations. Decisions are supposed to take 30 days. But since 2022, more than half of the cases have remained unresolved. Some have been going on for more than nine months. Wu said arbitrators are “expanding their operations” to reduce delays.
Moreover, the law has been repeatedly challenged in court, with health care provider associations and air ambulances Nearly 20 lawsuits related to the No Surprises Act have been filed.Arbitration has overturned CMS’s original arbitration guidelines in two cases, forcing CMS to make numerous adjustments to its arbitration procedures that have contributed to the long delays, according to legal experts at the O’Neill Institute for National and Global Health Law.
The most heated debate regarding the dispute resolution system revolves around the payment and enforcement of arbitrators’ decisions.
Federal health officials initially thought the law would help reduce health care costs, but arbitrators awarded doctors and other health care providers higher amounts than expected, potentially leading to higher premiums.
“The most likely outcome is that this law won’t provide any real relief to consumers and may actually push them in the opposite direction,” said Lauren Adler, a research fellow at the Brookings Institution’s Health Policy Center. Recent research into the possibility.
The amount was higher than expected but lower than what doctors’ groups had requested. Doctors have accused insurers of offering artificially low amounts, and as evidence they point to data from June showing that arbitrators are ruling in favor of doctors in the vast majority of cases.
Still, overall, health care providers have seen reimbursements fall by nearly 40% since the law went into effect in 2022, the report said. Recent Research Bankruptcy filings have been filed by emergency physician trade groups. At least one physician group, Envision Healthcare, cited the No Surprises Act as one of the reasons for its bankruptcy filing (the company has since emerged from court oversight).
If revenue declines continue, some physician groups may be forced to cut services. This will be especially true for rural hospitals, which often have lower margins and already struggle to recruit emergency physicians. “This puts the survival of so many practices at risk,” said Randy Pilgrim, chief medical officer at SCP Health, which provides doctors to emergency rooms across the country. “There are very few practices in the more than 30 states where we do business that aren’t impacted by this.”
Doctors also say insurers continue to delay payments or make incomplete payments even after arbitrator decisions. Their complaints to CMS are being ignored, the doctors said. CMS’s Wu said the agency actively investigates complaints under its jurisdiction.
It’s also unclear whether a court will be able to force the insurers to pay up. Pilgrim said he wrote about 75,000 letters to insurers seeking compensation after winning the arbitration award.
“There’s very little stopping this process,” he said. “You just keep pleading your case and hope you get somewhere.”
