Patients are largely protected from surprise medical bills, but they are paying the price for certain private equity-backed providers and out-of-network specialists who abuse the No Surprises Act. A new CBS News investigation examines how the law’s arbitration process — also known as independent dispute resolution (IDR) — is fueling outsized payouts to providers, and how workers ultimately foot the bill through higher premiums or reduced benefits.
Key takeaways:
Employers and consumers ultimately pay the cost of provider-led arbitration abuse and misuse.
- “A law designed to protect patients from surprise medical bills succeeded in eliminating unexpected charges but spawned a lucrative arbitration industry with providers and specialized middlemen extracting payments far above benchmark billing rates. The practice is ultimately driving up healthcare costs for consumers.”
- “The arbitration system Congress created to settle disputes between insurers and out-of-network providers allows doctors and resolution specialists acting on their behalf to win payments many times higher than typical rates for medical services. Those costs don’t disappear: Much of the money comes from employer-sponsored health plans, meaning workers may ultimately pay through higher premiums or reduced benefits.”
Arbitration awards that significantly exceed in-network rates create incentives for providers and IDR firms to submit more disputes, even ineligible ones.
- “Collectively, arbitrators making the decisions have earned more than $2 billion in fees.”
- “The law’s arbitration provision has also created an opportunity for intermediaries to guide providers through the process and rake in profits by taking a cut of bills that are up to 1,000% above the benchmark rate for a service.”
- “Halo and two other groups with investments from buyout firms collectively handled more than 75% of disputes settled in arbitration last year, according to Georgetown University’s Center on Health Insurance Reforms.”
It’s time to reform the system while preserving protections against surprise bills.
On October 8, Energy and Commerce Committee Ranking Member Frank Pallone Jr. announced the introduction of the Lower Premiums, Faster Payments Act. The legislation would replace arbitration with a payment system based on the median in-network rates. By replacing the deeply flawed arbitration system, this bill takes a critical step forward in safeguarding consumers and employers from untenable IDR costs.
Read the full CBS News investigation here and watch their video segment here.
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