Prior to the passage of the No Surprises Act, certain private equity-backed health care providers designed an entire business model around strategically exiting health plans’ networks as a way to maximize out-of-network reimbursements at the expense of patients, employers, and the broader health care system.
While the No Surprises Act has been effective in preventing unexpected medical bills from reaching patients, recent evidence confirms the very same providers are now abusing the law’s arbitration process (also known as independent dispute resolution or IDR) to collect higher payments. According to new data from the Centers for Medicare & Medicaid Services (CMS), more than 657,000 arbitration cases were filed in 2023 – 70 percent of which came from just four private equity-backed organizations: Team Health, SCP Health, Radiology Partners, and Envision.
While there are many examples of certain private equity-backed providers abusing the IDR process, below are some notable examples:
- Dumping ineligible claims into the portal: One large health plan recently received 17,000 arbitration disputes from the same provider in one day. Despite none of the disputes being eligible for arbitration and past the window to dispute, more than 1,000 of the claims had already gone through the IDR process.
- Sending in-network claims to arbitration: Another alarming trend is IDR entities (IDREs) making payment determinations on cases where the provider has an active contract with the health plan and is therefore not eligible for the IDR process. In these situations, the payment determinations are often well above the contracted rate the provider previously agreed to. In one notable example, an IDRE made a payment determination 20 times the in-network rate.
- Misrouting arbitration claims: Another particularly egregious practice that health plans and employers continue to see is providers misrouting arbitration initiations to prevent the payer from participating in the resolution process altogether. Some provider groups are using bot software to skip the open negotiations process, sending in an open negotiation request, then automatically taking the case to IDR without any intention of negotiating with plans.
Instead of pursuing misguided policy proposals that favor a handful of private equity-backed organizations – the Administration and Congress should take constructive, common-sense steps to address current flaws with the IDR process, including:
- Ensure clear and timely communications to all parties involved with IDR via a dynamic portal maintained by CMS;
- Require and enhance training and oversight for IDR entities on No Surprises Act statute and guidance to ensure compliance and mitigate instances of abuse or misuse;
- Mandate that IDR entities provide employers and health plans all the relevant information needed to process payment determinations;
- Establish timely processes for correcting errors on non-eligible claims; and
- Establish timely and transparent disclosures on IDR utilization by individual providers, as well as transparency on IDR entities’ performance to ensure objective decision-making.
For more information on the No Surprises Act, visit https://stopsurprisebillingnow.com/.
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