As out-of-network providers’ abuse of the No Surprises Act’s independent dispute resolution (IDR) process grows more extreme, costly, and widespread, the urgency for policymakers to act grows with it.
The latest editorial from the Washington Examiner says it all: “A modest reform meant to shield patients from surprise medical bills has become a multibillion-dollar windfall for hospitals, doctors, lawyers, and arbitrators. Patients pay the price through higher insurance premiums. Congress must fix its mistake.”
The editorial board traces how a narrow backstop turned into a profitable business model for a handful of private equity-backed providers and IDR middlemen — and how Congress can fix it and protect patients from footing the bill.
Highlights are included below (emphasis added). To read the full editorial, click here.
- “Congress passed the No Surprises Act to solve a real problem. Patients who followed the rules by paying their premiums and going to in-network hospitals were being ambushed by surprise bills from out-of-network emergency room doctors, anesthesiologists, and radiologists they had not chosen and often had not even met.”
- “Early drafts of the No Surprises Act solved this by requiring insurers to pay out-of-network providers a clear, market-based benchmark rate, usually tied to the median in-network price for the same service in the same area. This was the simplest and fairest solution. Patients would be protected from surprise bills, and providers would no longer be able to stay out-of-network and use the threat of balance billing to demand inflated payments.”
- “But hospitals, physician groups, and medical staffing firms fought back. They complained that a benchmark would give insurers too much leverage to impose prices on providers. What they really feared was losing the out-of-network windfall that surprise billing had created.”
- “So providers lobbied for an arbitration process… [IDR] was supposed to be a narrow backstop, not the heart of the law. Federal officials estimated that the process would handle just 17,000 disputes a year. Most claims were expected to settle before arbitration. Instead, arbitration became the business model.”
- “Payments that the arbitrators award are not modest and reasonable corrections. In some cases, they are enormous multiples of the qualifying payment amount, the benchmark meant to approximate median in-network rates. One study found that No Surprises Act arbitrations generated at least $5 billion in costs through the end of 2024, roughly $2.5 billion annually.”
- “The Congressional Budget Office expected the No Surprises Act to reduce commercial premiums by 1% because it would weaken providers’ ability to exploit out-of-network billing. But the CBO now warns that if providers can systematically win high arbitration awards, they have an incentive to remain out-of-network or demand higher in-network rates. That means higher premiums.”
- “Congress needs to end this giveaway to healthcare providers. The fix is straightforward. Go back to the original draft proposal that the providers fought against. Pay surprise-bill claims at a clear market benchmark, such as the median in-network rate, and abolish independent dispute resolution except for exceptional cases. Congress ended surprise bills once. Now it must end the arbitration racket it created.”
Find the full editorial online here. For more on how out-of-network providers are exploiting the IDR process, click here.
Recent Comments