Experts Assess the Effects of the No Surprises Act on Surprise Billing

The No Surprises Act may have successfully defended consumers from surprise billing but requires reworking in other areas, an issue brief from Urban Institute and the Robert Wood Johnson Foundation uncovered.

The researchers based their findings on more than 30 interviews with a broad range of stakeholders including consumer and employer organizations, medical billing companies, providers and payers, and state and federal regulators. These interviews were conducted between October 1, 2022 and January 31, 2023.

“Based on structured interviews with federal and state regulators and a broad spectrum of stakeholders, the NSA appears to be protecting patients from the most pervasive forms of balance billing and getting consumers ‘out of the middle’ of payment disputes between providers and payors,” the brief concluded.

“Although the limited evidence to date suggests that consumers are being well protected from balance billing in the situations covered by the NSA, some stakeholders remain concerned that gaps in the law can leave consumers with unexpected financial liability.”

Participants reported that the No Surprises Act successfully protected consumers from surprise billing. State regulators and insurers reported few complaints related to the Act—sometimes less than five across a state—and, for the consumer complaints that were related to the No Surprises Act, payers and providers typically adjusted the bill to the in-network cost.

Consumer advocates, employers, and provider representatives all confirmed that there have been a low level of consumer complaints around the No Surprises Act.

However, experts pointed out that if consumers are unaware of the law, they are less likely to file a complaint related to surprise billing. The researchers found that judging the No Surprises Act’s efficacy based on the number of consumer complaints might present a misleading standard.

Although the true state of consumer protections through the No Surprises Act is difficult to determine, providers and payers conformed to the law. This involved major systematic changes for both parties.

“To flag NSA-related claims, payors reported making intensive technical updates to claims processing systems,” the brief explained. “For some, this process initially required manual claims adjudication to ensure all NSA-eligible claims were identified correctly. Payors reported that they have now largely succeeded in automating this system.”

A key point of interest for all parties affected by the No Surprises Act is how it would affect healthcare costs and provider networks. The consensus among participants was that it is too early to tell. Many respondents projected that it would take several years before the downstream effects were discernable.

Many payers and providers are locked in tense negotiations over reimbursement. Payers have lowered their reimbursement rates for out-of-pocket claims. Providers protested that the new rates underpay providers, while payers retort that they lowered the reimbursement to the qualifying payment amount since they no longer have to pay the full amount in order to protect consumers.

“Payors raised concerns about the potential inflationary effect of high IDR awards on premiums, especially if providers prevail in court. But these effects may vary by state,” the brief found.

Payers have also denied provider concerns that insurers would shrink their networks. Providers reported that payers threatened to walk away from contracts with providers who did not lower their reimbursement rates.

In the future, stakeholders projected that negotiations over out-of-network reimbursement would impact in-network reimbursement. However, these results will not be observable for a few years and may only impact certain specialties.

The researchers concluded that lawmakers may need to expand the No Surprises Act to include services that do not fall under cover in the current law.

A separate report from the Morning Consult found that consumers continued to receive surprise bills after the No Surprises Act. But others indicated that the law blocked over 2 million surprise billing incidents.