October 11, 2023
Surprise medical bills are bills patients receive from out-of-network (OON) hospitals, physicians, and other providers even though they seek care at in-network (INN) facilities or for emergency care. According to a study published in JAMA (Chhabra et al., February 2020), over 20% of patients receiving care for one of seven common procedures at in-network hospitals received an out-of-network bill. Another study published by Peterson-KFF found that for large employer plans, 18% of all emergency visits and 16% of INN hospital stays had at least one OON charge associated with the care (Pollitz et al., February 2020). Surprise medical bills can be financially and emotionally devastating to patients already dealing with a medical emergency or serious health condition.
Congress enacted the No Surprises Act (NSA) in December 2020 to address the issue of surprise billing. As of January 1, 2022, the NSA prohibits surprise billing for OON emergency care, air ambulance rides, and facility-based non-emergency services, and requires group health plans and insurers to cover the care received at INN cost-sharing levels. The law also established a federal independent dispute resolution (IDR) process for plans and insurers and OON providers and facilities can utilize to resolve disputes over OON rates.
The NSA provides an important framework aimed at overall cost containment and consumer protection from surprise medical bills. It effectively protected over nine million Americans from surprise bills in the first nine months of implementation, and is estimated to prevent nearly 20 million surprise bills by mid-2023 (AHIP-BCBSA, 2022). However, near-constant litigation since enactment challenging the law, its implementing regulations, and the federal IDR process, has delayed full implementation of these important protections and increased costs to patients.
Surprise billing practices impede the ability of employer plans sponsors to provide robust, comprehensive, and cost-effective INN coverage, support employees and their families, and manage health care spend. This, in turn, results in excessive costs for the health care system generally, employer plan sponsors, and the individuals enrolled in employer-sponsored coverage because of higher premiums and/or less valuable benefit offerings based on reduced INN participation. Therefore, Business Group on health supports:
- A thoughtful and balanced approach by the Departments of Labor, Health and Human Services, and Treasury (collectively the Departments) to continue implementing the NSA in a manner that improves clarity and certainty for individuals receiving care, promotes early and efficient payment resolution between payers and providers, and reduces the need for expensive and time-consuming independent dispute resolution (IDR) processes;
- Any policy solutions that expand upon the NSA surprise billing provisions, including anticipated ground ambulance proposals, should improve predictability and transparency, and lower, not increase, premiums and costs for consumers and group health plans;
- Continuing to ensure that patients are adequately informed about the INN or OON status or changes of their health care providers and are empowered to make health care decisions through credible informed consent requirements.
- Avoiding inadvertently incentivizing providers to reject network participation;
- Building predictable and uniform dispute resolution processes, including IDR, under the NSA to help shift towards negotiated resolutions and away from IDR;
- Ensuring that value-based payment arrangements, which depend on provider participation in networks, are not hindered by unintended consequences of implementing the NSA and any subsequent policy solutions; and
- Maintaining and protecting self-insured plans’ preemption from state laws relating to surprise billing.
WHY IT MATTERS
- At the time of enactment, the Congressional Budget Office (CBO) estimated that the NSA would reduce private insurance premiums by 0.5%-1.0%, reduce federal deficits by $17 billion over 10 years, and save consumers nearly twice that amount by lowering premiums, cost-sharing, and no longer receiving surprise bills (CBO, 2021).
- Between April 15, 2022 and March 31, 2023, disputing parties initiated over 334,000 disputes through the federal IDR portal, almost 14 times the caseload the federal government initially estimated (DOL-HHS-Treasury, 2023). These disputes involve complex deliberations, with the unanticipated volume increasing the burden on both the federal government and plan sponsors.
- In addition to the unanticipated volume on the IDR system, more than 20 lawsuits have been filed against the NSA, implementing regulations, and IDR entities. These lawsuits have generally served to exacerbate the IDR case backlog, increase uncertainty and administrative and claim cost, and undermine the successes of the NSA for patients and their families by delaying implementation of the law.
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