ICYMI: How Private Equity Is Gaming the No Surprises Act

Sep 13, 2024 | Arbitration, Blog Post, Private Equity

Researchers at Georgetown University’s Center on Health Insurance Reform recently analyzed new data from the Centers for Medicare & Medicaid Services (CMS) detailing arbitration outcomes from all of 2023 under the No Surprises Act.

While the law has been effective in preventing unexpected medical bills from reaching patients, the latest data confirms that certain private equity-backed health care providers are manipulating the arbitration process (known as the Federal IDR Process) to collect higher payments at the expense of consumers, who then pay higher premiums to cover the costs of paying more to out-of-network providers. These findings further intensify concerns about the arbitration process’s vulnerability to abuse and the No Surprises Act’s overall ability to control health care costs effectively.

Below are three key insights from the analysis. To read more, click here.

Providers are flooding the system with frivolous claims.

  • “The number of newly initiated cases grew more than fourfold from 69,000 in the third quarter of 2022 to 318,000 in the fourth quarter of 2023.”
  • “There were 657,040 newly initiated cases filed in 2023, about 70 percent of which came from just four organizations, all backed by private equity: Team Health, SCP Health, Radiology Partners, and Envision.”

The vast majority of arbitration decisions benefit health care providers.

  • “The provider win rate grew from 72 percent to 85 percent.”
  • “[Providers] continued to win payments at a median rate of more than three times the QPA—322 percent to 350 percent, depending on the quarter.”

Private equity-backed providers are fueling abuse of arbitration.

  • “Both Team Health and Singleton Associates won more than 90 percent of their cases in the past three quarters of 2023.”
  • “Team Health typically won an amount double the QPA across all quarters. Singleton Associates… won almost fivefold of QPA in the first quarter, and in the past three quarters received median payments up to eight times QPA.”

The big picture: The full scope of 2023 arbitration data confirms that “the story emerging from the early months was not a fluke.” The researchers ultimately conclude that “the volume of cases entering the IDR process remained high, and providers continued to maintain a high rate of success.”

For more information on the No Surprises Act, visit stopsurprisebillingnow.com.