No Surprises Act Prevented 10M Surprise Medical Bills, But IDR Use Grows

The No Surprises Act (NSA) helped prevent 10.1 million surprise medical bills in the first nine months of 2023, according to a survey from AHIP and the Blue Cross Blue Shield Association (BCBSA).

The No Surprises Act took effect on January 1, 2022, for those enrolled in commercial health insurance or group health plans. The law states that when patients covered by private health plans are treated for emergency services or at an in-network facility by an out-of-network provider, the facility or provider cannot bill the patient above their in-network cost-sharing amount.

The law also created a process for resolving disputes on the health plan’s payment to the out-of-network provider or facility.

AHIP and BCBSA distributed the survey to 80 health insurance providers in November 2023 and received 21 responses, representing 139 million commercial enrollees nationwide. The responding health insurance providers shared their current enrollment, the number of claims incurred and paid between January and September 2023, which of these claims were NSA-eligible, and the number of claims submitted to independent dispute resolution (IDR).

Respondents reported 6.6 million claims that were eligible for the NSA. When multiplied by the 2022 Census estimate of the total number of commercial enrollees (213 million), AHIP and BCBSA estimated that 10.1 million claims were NSA-eligible nationwide.

The majority of the NSA-eligible claims were resolved through an initial payment—5.2 million based on the survey and 8.0 million based on national estimates. Less than a quarter of the claims entered the 30-day open negotiation process, most of which (73 percent) were resolved without initiating the IDR process.

Before the NSA was enacted, CMS estimated that 17,000 claims would enter the IDR process each year. However, 334,828 disputes were initiated between April 15, 2022, and March 31, 2023, a figure almost fourteen times greater than the agency’s estimate.

After proposing new regulations related to the IDR process in October 2023, the government predicted 420,000 initiated disputes for the next year. However, AHIP and BCBSA estimated that nearly 670,000 claims were submitted to the IDR process between January 1 and September 30, 2023, and this figure is not likely to have peaked yet.

The increased use of IDR may indicate that some providers and hospitals may be trying to exploit the arbitration process to increase profits, AHIP and BCBSA suggested.

The survey also found that 67 percent of health insurance providers said they increased their provider networks since 2021, following the enactment of the NSA. A third of payers reported their provider networks did not change, while no plans reported decreases.