Cracking the Code on Surprise Medical Bills Pt 2: NSA Under Threat

Medical debt shouldn’t ruin lives, but unfortunately, it’s still a big issue in the U.S. Before 2021, one of the nastiest surprises people could face was getting slammed with unexpected medical bills after seeking care. While new consumer protections have helped alleviate this burden, some of these safeguards are on shaky ground. To keep families protected, advocates need to stay informed and watch for any potential threats to the No Surprises Act (NSA).

In part one of our series on surprise medical billing, we highlighted the toll these unexpected expenses can take on families. The NSA, a landmark consumer protection law, was designed to protect patients from surprise bills and resolve conflicts between insurers and healthcare providers in a way that healthcare costs wouldn’t escalate and hit families where it hurts.

January 1, 2024, marked two years since the No Surprises Act began protecting consumers. And you know what? More than a million American families are feeling the positive impact every month. The NSA ensures that if you’re in an emergency situation or getting non-emergency care at an in-network hospital, hospital outpatient department, or ambulatory surgical care facility, you won’t get stuck with sky-high out-of-network bills. Instead, it ensures more billing transparency and fairness.

If we’re not careful, the NSA could be crippled right before our eyes. Since its implementation, certain corporate provider associations and staffing agencies have been on a mission to chip away at the law. They’re filing lawsuits to overturn key provisions that protect people from unexpected medical costs and swamping the system with endless payment disputes. Litigation has already led to the removal of some critical guardrails that help keep costs in check and money in patients’ pockets.

These lawsuits aim to strip even more protections, which could seriously undermine the NSA’s effectiveness in shielding people from surprise bills. If these targeted attacks continue, the law’s ability to prevent unexpected medical expenses might be compromised. We must stay informed and push back against these obstacles to ensure that the No Surprises Act can continue to safeguard families across the country.

Private Equity’s Role in Surprise Billing

Private equity firms, which pool money from investors to gain control of companies, have a pretty deep history with surprise billing — and they’re playing a big role in dulling the NSA’s effectiveness.

Back in the late 2010s, these firms aggressively invested in physician staffing agencies, raking in massive profits through strategies like intentionally staying out of insurance networks and sometimes charging almost 10 times more at hospital emergency departments than at urgent care centers for the same diagnosis.¹ Before the No Surprises Act (NSA), this setup was a gold mine for private equity.

Two major players, TeamHealth and Envision Healthcare, formed a lobbying group and spent over $57 million fighting against the NSA, hoping to keep the cash flow steady. Even after the law was passed, disputes over out-of-network bills still persist, often driven by staffing agencies owned by private equity firms, concentrated in just a few states.²

The fight isn’t over yet, and these companies continue to challenge the NSA, attempting to weaken its protections. To keep families from facing financial ruin over medical care, it’s crucial to stay aware of these tactics and support efforts to uphold the No Surprises Act.

Chipping Away at Important Patient Protections

The NSA introduced an arbitration system known as Independent Dispute Resolution (IDR) to keep patients out of the middle of payment negotiations between insurers and providers for out-of-network care. The goal is to ensure providers are paid fairly while protecting patients from costly disputes.

But excessive use of the IDR process could result in increased costs for consumers. Recent data released by the Centers for Medicare and Medicaid Services (CMS) from the second half of 2023 shows that providers won around 82% of IDR cases, securing payments far above median payment rates. That’s much higher than was expected by policymakers and even the Congressional Budget Office. This has consumer advocates worried that providers and staffing agencies will flood the system with claims, pushing the cost burden onto patients through increased premiums and cost-sharing.³

Advocates have also pointed out loopholes that allow surprise bills to slip through the cracks, like when some plans or providers fail to protect patients properly, misuse consent forms, or lack oversight. This leaves individuals having to navigate their rights under the NSA, figure out when to dispute a bill, and endure lengthy appeals. There are also concerns that some insurers might deny care by claiming certain services aren’t medically necessary — and therefore not covered by the NSA — leaving patients once again on the hook for a surprise medical bill.⁴

What can we do?

Stay informed, reach out to your representatives, and know your rights!

The No Surprises Act (NSA) is saving many patients from surprise medical bills, but it’s up to us to understand our rights and file complaints if we get billed incorrectly. While notices and consent forms are supposed to help, many states don’t have a system to ensure people receive this info. Luckily, CMS has created a comprehensive NSA toolkit for consumer advocates to help spread the word and educate people about their rights.

Advocates and policymakers need to stay vigilant to make sure the NSA keeps doing its job of protecting patients from unexpected bills and rising costs. When Congress passed the NSA, the goal was to make healthcare more affordable. It’s up to all of us to make sure that promise holds strong!

Footnotes:
^1. 3 Ho, V., Metcalfe, L., Dark, C., Vu, L., Weber, E., Shelton, G., Jr, & Underwood, H. R. (2017). Comparing Utilization and Costs of Care in Freestanding Emergency Departments, Hospital Emergency Departments, and Urgent Care Centers. Annals of emergency medicine, 70(6), 846–857.e3. https://doi.org/10.1016/j.annemergmed.2016.12.006
^2. Centers for Medicare & Medicaid Services, “Initial Report on the Independent Dispute Resolution (IDR) Process, April 15–September 30, 2022,” accessed Feb. 22, 2024, https://www.cms.gov/files/document/initial-report-idr-april-15- september-30-2022.pdf; Centers for Medicare & Medicaid Services, “Partial Report on the Independent Dispute Resolution (IDR) Process, October 1–December 31, 2022,” accessed Feb. 22, 2024, https://www.cms.gov/files/document/partial-reportidr-process-octoberdecember-2022.pdf.
^3. https://www.brookings.edu/articles/a-first-look-at-outcomes-under-the-no-surprises-act-arbitration-process/
^4. https://twitter.com/LorenAdler/status/1777332065190527236