How providers avoid complying with the No Surprises Act

Since 2022, the No Surprises Act has helped protect consumers from unforeseen medical bills when patients visit in-network hospitals. But, as journalists heard during a session at HJ24 last month, physicians and other providers have ways to evade compliance.

Three experts explained the challenges of enforcing the landmark law intended to protect patients from unexpected out-of-network medical bills when visiting in-network facilities. Those experts were:

• Elisabeth Rosenthal, M.D., a senior contributing editor at KFF Health News.
• Zack Cooper, Ph.D., associate professor of health policy and economics at Yale University.
• Diane K. Spicer, a supervising attorney at the Community Service Society of New York.

As the title of their session suggests, "Surprise! Providers are finding ways around the No Surprises Act," the act has not prevented consumers from getting unexpected bills. "Often patients pay these bills because they don't know they don't have to," Rosenthal said. What's more, patients often do not consent to such bills, and yet they often get stuck paying them.

In February, Rosenthal wrote this article for KFF Health News, "The No Surprises Act Comes With Some Surprises," in which she explained that more than two years since the act became effective, there's good news and bad about how it works.

Despite the challenges, the law has protected millions of patients from surprise bills, including bills related to out-of-network emergency air ambulance rides or treatment that an out-of-network anesthesiologist or emergency room doctor provides, Rosenthal wrote. Before she joined KFF Health News, Rosenthal helped hundreds of consumers as the author of the Paying Till It Hurts column in The New York Times. She is also the author of the book, "An American Sickness."

Surprise bills come even though almost all patients seek care in network when they would generally pay only deductibles, co-payments and other cost sharing, she explained.

But the bad news is that the law added even more chaos to an already chaotic and frustrating health care billing. It requires insurers and out-of-network providers to negotiate what both sides agree to as a fair payment, she added.

If the two parties fail to agree, the law allows either side to request arbitration under what's called Federal Independent Dispute Resolution (IDR). Earlier this year and then again in June, CMS reported data on IDR in 2023, and the Brookings Institution provided an analysis of that data here: "A first look at outcomes under the No Surprises Act arbitration process."

In December, the Government Accountability Office (GAO) reported that after IDR became effective in April 2022, arbitrators reviewed nearly 490,000 disputes over the next 14 months. About 61% of those disputes remained unresolved by June 2023. The primary cause of unresolved disputes was the complexity of determining whether disputes were eligible for such review, the GAO said.

Researchers quantify the problem

As a health policy researcher, Cooper was familiar with Rosenthal's work at the Times and at KFF Health News well before the No Surprises Act was passed as part of the Consolidated Appropriations Act of 2021. Reading how consumers were harmed, he wondered how often patients receive surprise bills, he said.

"As callous as it sounds, if these bills were sort of one-in-a-million, then the solution is a GoFundMe page," he explained. "But, if it's really common, then you've got a policy problem."

Working with Fiona M. Scott Morton, the Theodore Nierenberg Professor of Economics at the Yale School of Management, Cooper found that about one in four to one in five patients who visited an in-network hospital in an emergency received care from an out-of-network emergency-room physician. "And that, for me, was staggering," he commented.

The New England Journal of Medicine published Cooper and Scott Morton's research Nov. 17, 2016, "Out-of-Network Emergency-Physician Bills - An Unwelcome Surprise."

Patients are seeking answers

Following Cooper, Spicer explained that as the supervising attorney of community health advocates at the Community Service Society, she manages the ombudsman program under the Affordable Care Act's Consumer Assistance Program in New York. A toll-free helpline for consumers gets 8,000 to 10,000 calls annually, she said.

"We get a lot of calls about out-of-network bills," she commented. When a parent takes a child to the ER, the physician may be out of network, which is unknown to the parent, she said. Also, consumers often are unaware that anesthesiologists, radiologists, and other specialists often are out-of-network, which means the patients get billed, she added.

"We also get a lot of calls about surprise bills, and a lot of those calls were about a different kind of surprise bill that we hadn't anticipated," she explained. Those calls relate to out-of-date information in health insurers' directories of in-network hospitals and other providers, Spicer added. When that happens, patients get billed, she said.