With the No Surprise Act, the US government sought to ban surprise medical bills and reduce costs for patients and federal agencies. However, the opposite seems to have happened.
Since January 1, 2022, the No Surprise Act is in effect in the United States. It was designed to prevent unexpected and unreasonably high medical bills from out-of-network providers or facilities, which insurers would often refuse to cover in its entirety, so that individuals would be left with a so-called “balance bill”. Three years ago, when the Act was being developed, the Congressional Budget Office predicted that it would lower the federal deficit by billion over the coming decade and would additionally lower health insurance premiums. But now, a new progress report suggests the opposite has happened.
Out-of-network billing often occurs after an accident or sudden illness, when patients are unable to search for the cheapest treatment option. In most cases, patients only realize that an out-of-network service was employed when they receive the medical bill and they do not know if the amount billed is correct or if they even received all the treatments for which they are required to pay.
To prevent unreasonably high medical bills, the No Surprise Act limits the amount patients can be asked to pay for balancing bills. This limit is defined by the median in-network rates for the same treatment, also called qualifying payment amount (QPA). It further outlines the process for dispute-settling of provider and insurance company.
The Biden’s administration’s new progress report now revealed that there has been a massive increase in submitted disputes. During the first half of 2023, 290.000 disputes were submitted, which is 13 times higher than the average submission number for an entire year. As a result, the federal agencies have to devote more time and money to processing these complaints than they expected.
The report also showed that 77 % of the disputes in 2023 were won by out-of-network providers or facilities or air ambulances and that in over 80 % of payment disputes, the arbiter settled on an amount higher than the QPA. “This raises concerns for folk that envisioned the arbitration process as helping moderate costs rather than be a tool these companies can leverage to obtain higher payment,” commented Zachary Baron, director of Georgetown University’s Health Policy and Law Initiative. In other words, the Act has not been successful in reducing out-of-network bills to the level of the QPA. “From the outside, the QPA sounds like a fair price,” said Katherine Hempstead, a senior policy adviser with the Robert Wood Johnson Foundation. “But there must be some extend to which providers are able to successfully argue that the QPA is not fair or too low.”
In the end, because the final pay rates determined by the arbiters usually exceed the QPA, insurers are now paying more than before the Act was passed. This could have a downstream effect on patients, warned Baron: “They might not feel it right away, but maybe premiums are going up 4 % or 6 %”. If that were to happen, the No Surprise Act would have failed both predictions of the Congressional Budget Office: Reducing federal spending and lowering health insurance premiums.
Image source: Brooke Cargle, unsplash
