Insurer groups issue report showing the No Surprises Act’s early impact on patient billing

The annual volume of bills that end up in the arbitration process could be far greater than the federal government initially projected.

More than 2 million potential surprise medical bills were prevented during the first two months of the No Surprises Act (NSA), according to a survey and analysis by the health insurance lobby.

AHIP and the Blue Cross Blue Shield Association produced the new report, which was based on survey responses received online in April from 31 health plans that collectively represent 54% of the commercial insurance market.

Analysts calculated the average number of claims among the plans’ 115 million enrollees and the share of claims that were subject to the new surprise-billing regulations, which took effect at the start of 2022 and protect patients from owing out-of-network rates after receiving emergency services, nonemergency services from an out-of-network provider at an in-network facility, and air ambulance transport.

The analysts extrapolated those numbers to arrive at the 2 million sum for January and February. Over the course of a year, the projected number of claims subject to NSA protections would exceed 12 million.

The regulations estimated that 17,000 claims per year would be subject to the arbitration process established by the law to settle disputes over out-of-network payments from insurers to providers. But as the new report notes, that number would be exceeded by a wide margin if even a tiny fraction of the projected 12 million claims ends up in the process formally known as independent dispute resolution (IDR). The portal for initiating IDR cases opened in mid-April but has been affected by delays.

Arbitration criteria remain TBD

With updated regulations on the IDR process pending from the U.S. Department of Health and Human Services (HHS), there’s an evident public relations component to the new survey and accompanying commentary.

“The findings of the AHIP-BCBSA survey are important to demonstrate how many consumers have already benefitted from the NSA and to underscore the extent of total claims that could be impacted if the IDR process is not a predictable process with payment amounts that trend towards market rates,” the insurers’ report says.

Providers have gone to court to challenge the previously issued regulations, which called for arbitrators to use the qualifying payment amount (QPA) — that is, the median in-network amount for a given service in a given market — as the focal point in settling payment disputes.

Among at least six cases that have been filed, the only one to be decided thus far is a Texas Medical Association suit in which a federal judge ruled that placing so much emphasis on the QPA diverged from legislative intent. In response, HHS issued new informal guidance and announced it soon would write new regulations that incorporate other criteria, although to what degree remains to be seen.

Along with various business groups, AHIP and BCBSA are members of the Coalition Against Surprise Medical Billing, which recently commissioned a Morning Consult poll of consumers. Results showed 79% of voters are “very” or “somewhat” concerned that the lawsuits could delay or overturn the newly established billing protections.

However, of the six lawsuits, only one — brought by a physician and surgical practice in Long Island, New York — argues that the entire No Surprises Act should be invalidated, and that suit is considered a longshot to succeed. The others seek only to modify the IDR criteria.

What’s at stake

Health plans and some consumer advocates have argued that without the strict parameters established by the QPA, arbitration outcomes could be subject to greater variation and, in turn, lead to healthcare cost inflation.

Those who instead favor expanding the criteria say giving so much weight to the QPA could end up restricting access to care by allowing insurers to be increasingly selective about which providers they bring into their networks.

“If insurance companies know that they can pay a provider the median in-network rate, then there’s absolutely no incentive to get them in-network,” Rep. Brad Wenstrup (R-Ohio) said during a federal budget hearing April 28.

“If you stray from the letter of the law, the policy will lead to narrow networks,” he added. “And we are going to have some problems. There won’t be enough doctors available to take care of patients across America, especially in emergency situations, especially in rural and underserved communities where the margins are just so very thin if you even can get over the margins.”