Researchers from the Brookings Institution recently analyzed the latest data from the Centers for Medicare & Medicaid Services (CMS) detailing arbitration outcomes under the No Surprises Act (NSA). The analysis reviews Q3 and Q4 2024 outcomes as an update to their earlier report examining data from the first half of the year.
While implementation of the No Surprises Act got off to a strong start in 2023 by preventing more than 1 million surprise bills per month, the latest data underscores persistent issues within the arbitration process, intensifying concerns about its ability to control health care costs effectively.
Below are four key takeaways from the report:
- Arbitration decisions continue coming in significantly higher than Medicare reimbursements and in-network rates.
With complete arbitration data from 2023 now available, it is clear that average payments resulting from arbitration are significantly higher than the average in-network reimbursements before the enactment of the No Surprises Act.
Crucially, this disparity was even more pronounced in the second half of 2023 and with specialty services. Notably, the analysis found:
- “For emergency services, the prices emerging from IDR [Independent Dispute Resolution] during the second half of 2023 averaged 4.0 times what Medicare would pay…”
- “The discrepancy was even larger for imaging services, where prices emerging from IDR during this period averaged 6.6 times Medicare, whereas adjusted estimates of pre-NSA mean in-network prices for similar services ranged from 1.9 to 2.5 times Medicare.”
- “For all three types of services [emergency care, imaging, and neonatal/pediatric critical care], our estimates for the second half of 2023 are higher than the estimates we for the first half of 2023, with imaging services seeing a particularly large increase, from 5.0 to 6.6 times Medicare.”
If future data continues to show escalating payments through arbitration, it will confirm the current system is incapable of containing health care costs and protecting patients.
- Arbitration decisions overwhelmingly favor providers.
The latest data confirms that arbitration decisions have strayed significantly from the Qualified Payment Amount (QPA) and overwhelmingly favor providers. While Brookings found that insurers’ offers were, on average, slightly above the QPA, “providers submitted much higher offers… and prevailed at least four-fifths of the time.”
This trend raises serious concerns about how ongoing litigation from private equity firms and out-of-network providers may be undermining the cost-savings measures included in the law.
- There is little transparency into how arbitrators reach decisions.
While the updated CMS data provides fresh insights, Brookings’ analysis highlights that it leaves the crucial question of how arbitrators are reaching decisions unanswered.
The researchers go on to explain that “the answer to this question may help inform ongoing debates about what, if any, guidance the federal government should give arbitrators and shed light on why the Congressional Budget Office (CBO) prediction that IDR decisions would hew close to the QPA has not been borne out.”
The Coalition Against Surprise Medical Billing (CASMB) continues to request additional information about how arbitrators reach decisions, and we have issued recommendations to the Biden administration about additional guidance and training that should be provided to arbitrators.
- Without adjustments, the No Surprises Act will not succeed in its mission to reduce costs for patients.
The full scope of data from 2023 paints a discouraging picture, with arbitration decisions frequently exceeding previous in-network prices and, in some instances, matching or surpassing prior out-of-network rates.
Brookings’ analysis concludes that they see “little chance that the law will meaningfully reduce prices and premiums, as CBO had predicted at enactment, and see a realistic possibility that the law will actually raise prices and premiums, in contrast to both CBO’s predictions and the stated goals of the law’s drafters.”
CASMB will continue to raise concerns with policymakers about how the current, expansive arbitration process is ripe for misuse, and we look forward to working with Congress and the administration to improve the No Surprises Act to continue protecting patients from unnecessary costs.
For more information on the No Surprises Act, visit https://stopsurprisebillingnow.com/.
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