Downstream Impacts of Recent Surprise Billing Law Remain Uncertain

The impacts related to the No Surprises Act—which Congress included in the Consolidated Appropriations Act in order to address surprise billing—remain unclear, a Kaiser Family Foundation (KFF) issue brief indicated.

The brief outlined four areas of uncertainty regarding the Act’s downstream effects.

First, it was unclear whether the consumer protections included in the No Surprises Act will work.

While the law established a complaint process, consumers often do not leverage the avenues already in place.

For example, on the Affordable Care Act marketplace, payers denied approximately 17 percent of all in-network claims in 2019, according to a previous KFF issue brief. Consumers appealed less than one percent of these denials. Six in ten appeals were still denied after the review process.

This data demonstrated that consumers turned to the appeals process rarely and, when they did, they often did not see positive results.

The federal government could improve the No Surprises Act protections by bolstering statewide consumer assistance programs, the February KFF issue brief suggested. These programs are already in place but Congress has not appropriated funding to them in the past decade.

Alternatively, lawmakers could direct some of the $500 million in implementation funding towards preventing out-of-network billing issues upfront. Out-of-network providers may need financial support to acquire the right tools in order to address payment issues with payers instead of expecting the patients to work it out with their health plans.

Second, it was uncertain which method for resolving surprise billing disputes—either payer-provider dispute resolution or independent dispute resolution—will be most utilized. The latter could have a greater impact on resolution costs and timeframes.

While the Act offered independent dispute resolution as a form of rectifying billing issues, Congress preferred that payers and providers sort out their own payment conflicts and incentivized parties to do so.

Independent dispute resolution is not new. However, the question is whether Congress’s incentives will effectively drive payers and providers to settle disputes on their own. The federal government will need to ensure that there are enough independent dispute resolution entities available when the Act goes into effect, which may require resources and funding.

“Federal implementers will need to consider the number and type of IDR entities to engage.  State surprise medical bill resolution systems have followed different approaches to establish IDR capacity,” the issue brief explained.

“In addition to IDR fees (which the losing party pays) the law requires the federal government to establish a federal administration fee for the program, another important implementation detail.”

Third, employer-sponsored health plans will have to contract with at least three independent review organizations, which could impact payers. This is to ensure that the independent dispute resolution entity has no connection—familial, economic, or otherwise—with either the provider or payer.

Finally, the independent dispute review process will require data collection and monitoring. The impacts of this administrative burden were unknown.

Each quarter, the Secretary of HHS will have to ensure transparency by posting online the number of surprise bills that proceed into the independent dispute review process, the cost, and how payers and providers cover that cost, along with other party and dispute details.

The Secretary of HHS, the Attorney General, and the Federal Trade Commission will have to submit a yearly report on the law’s impact on competition, costs, and access to care.

A separate study from the Government Accountability Office (GAO) will report on the impact related to network participation and adequacy and a second GAO report will address out-of-pocket healthcare spending and service prices.

Two deadlines are already approaching for the Act. The federal government will have to publish a document outlining how health plans should determine in-network cost-sharing as well as what information they must offer to providers. Additionally, HHS will have to create a complaints process.

Both of these stipulations must be accomplished by July 1, 2021. However, most of the law takes effect on or after January 1, 2022, giving Congress and relevant parties time to discern potential impacts.