After years of debate, the No Surprises Act passed in 2020 and became effective in 2022 but remains only half-implemented. While some patients have avoided unexpected medical bills due to the law, it remains mired in litigation about how to resolve billing disputes between health plans and providers. In October 2021, the U.S. Departments of Health and Human Services, Labor, and the Treasury established an independent dispute resolution (IDR) process to determine out-of-network payment amounts when providers and health plans disagreed about reimbursement. Providers allege that the federal arbitration process is skewed in commercial insurers’ favor. Health plans counter that providers are abusing the system for financial gain.
In February 2022, a federal court blocked the federal arbitration rule, saying it was inconsistent with the No Surprises Act intent. In August 2022, the Departments re-drafted the arbitration rule but providers complained it did not resolve the original issues. On February 6, 2023, a federal court blocked the re-drafted rule. It is unclear whether HHS will appeal the ruling or draft another rule.
- Federal rules declared that health plans’ median in-network rate should be the primary factor in determining how much out-of-network providers are paid. Providers allege that using plans’ median rates skews the arbitration results in commercial insurers’ favor, which is contrary to the intent of the No Surprises Act.
- Despite the litigation, HHS is allowing arbitrators to resume issuing payment determinations for all cases involving services provided before October 25, 2022, the effective date of the August 2022 final rule that was overturned by the federal court.
- Cases submitted to the federal arbitration process are overwhelming the system, with more than 164,000 disputes filed from April through early December 2022.
Health plan and out-of-network providers disputes are not new. Before the No Surprises Act mandated a federal arbitration process, providers who did not have a contract with a health plan have always been forced to sue if the reimbursement was unsatisfactory. So far, the No Surprises Act is only exacerbating a long-time problem. Some members of Congress have announced plans to hold hearings and engage in closer oversight of the No Surprises Act implementation. To avoid lengthy delays and lobbying fees, noncontracting providers may be well advised to reach agreements on payment rates with health plans before treating their enrollees for now.
Axios. What's Next on the No Surprises Act. Accessed April 25, 2023.
Henry TA; American Medical Association. Court: No Surprises Act Final Rule Favors Insurers, Must be Revamped. Accessed April 25, 2023.