A No Surprises Act Update

For the remainder of the summer, we will repost educational material with edits and updates as appropriate. Please tune back in after Labor Day for new material. Thanks, and have a wonderful summer.

Today’s video is an update on the impact of the No Surprises Act which took effect in 2022. For more detailed information, please read “Billing Law Puts Pressure on Healthcare Providers,” if you have access to the Wall Street Journal, an article published in the November 29, 2023 paper, can be seen here.

To recap, this legislation was passed because patients only have meaningful financial protection from excessive charges in the U.S. if they remain in-network for services. By definition, in-network providers have contracted with insurers to deliver services at negotiated rates. This is not to suggest that all doctors who are out-of-network or choose not to participate with insurance plans are gouging patients but enough were charging high rates and in questionable circumstances that this became a serious financial problem for many people who never intended to be out-of-network for medical services.

The law, which took effect in 2022, addresses the longstanding problem of people receiving services at in-network facilities only to find that groups of doctors were out-of-network, like anesthesiologists, Emergency Department physicians, or neonatologists. The law also applied to air ambulance providers. A process was established to appeal what were deemed unreasonable charges to insured individuals and was also for uninsured patients who feel they were charged unreasonable amounts.

I state in the video that it appears the law is working and, on reflection, that is probably premature. But it is clear from the article that the law is having a significant impact as it cites various physician staffing agencies and an air ambulance company as attributing their financial distress, even to the point of bankruptcy, to this law.

The article states that there were some 489,000 claim disputes filed during the period from April 2022 to July 2023, a significant multiple of what government agencies anticipated. The article also goes on to report that Air Methods, an air ambulance company founded in 1980, filed for bankruptcy presumably at least partially as a result of the law, and that physician staffing companies like Team Health and Radiology Partners have experienced cash flow shortages.

At the same time, according to the article, healthcare providers have prevailed over insurers in a majority of the billing disputes. We are not sure what this actually means since the process involves arbitration, as mentioned below.

In the past, we have reported on in-network negotiated rates which appeared unreasonably low. We’ve also reported on charges that were true outliers at the high end charged to out-of-network and uninsured patients. It does seem unfair to charge excessive charges in emergency situations or when someone has a procedure or surgery at an in-network facility. We would hope for a healthcare world that is simpler and fairer for all. Unfortunately, in our opinion, we have allowed our healthcare system to be terribly complex, wasteful, administratively cumbersome, and wildly adversarial.

Most important, if you feel you have been unfairly charged by a provider in one of the situations described above, you are entitled to access this independent dispute resolution (IDR) process. The IDR process is an arbitration process. Both the provider and the plan each submit to a third-party arbitrator, which is a certified IDR entity, their best and final offers. The certified IDR entity reviews the offers and makes a determination. For more info, click here.

Thanks.