The No Surprises Act (NSA), which took effect on January 1, 2022, was designed to protect patients from unexpected medical bills resulting from out-of-network (OON) care. By removing patients from payment disputes between insurers and providers, the NSA aimed to streamline the negotiation of fair payments between these parties.
However, the rollout of the NSA created significant challenges for many providers. Critics argue that the law unintentionally favored insurers, emboldening some to adopt aggressive tactics that disproportionately impact smaller, independent physician groups.
“These challenges have an outsized impact on independent emergency groups,” explains Dr. Jennifer Raley, Managing Partner at Wake Emergency Physicians, a mid-sized physician group that manages several emergency departments across North Carolina.
Most independent emergency groups rely on fair commercial insurance payments to offset financial losses from Medicare, Medicaid, and uninsured patients. This is especially true for smaller practices. Maintaining sustainable commercial rates is crucial to them remaining viable and avoiding consolidation with larger corporate entities.
The Changing Reimbursement Landscape
“Before the NSA, both parties had an incentive to stay in-network,” says Dr. Raley. “There were times we might have been out-of-network for a short period, but our goal was always to maintain stable contracts.
Since the NSA took effect, some insurance payers have pressured in-network providers to accept significantly lower rates or threatened to push them out of network.
In emergency medicine, one of the biggest challenges has been the reluctance of payers to negotiate reasonable in-network rates. Leaving many providers with a difficult choice: accept unsustainably low in-network rates or remain out of network.
“This is a difficult position for smaller independent groups,” explains Dr. Raley. “Shrinking reimbursement rates have already driven us to make big improvements in operational efficiency and provider utilization. Now, we’re at a point where there’s not much left to cut.”
For many physician groups, this dilemma has resulted in being forced out of network, forcing them to rely on the established process for dispute resolution.
IDR Offers a Glimmer of Hope for Providers
A key component of the NSA is the Independent Dispute Resolution (IDR) process, which is used to settle OON payment disputes when payers and providers can’t agree on a fair payment amount. However, many emergency groups were initially discouraged from participating in IDR due its complexity and administrative burden.
However, the cumbersome nature of the IDR process—along with its high administrative costs—initially dissuaded many emergency providers from engaging in it.
“For the first year or so of being out of network, we were paralyzed by the uncertainty and delays,” explains Dr. Raley. “We simply didn’t have the resources to dedicate to a process that we didn’t understand and was frequently changing.”
Over time, however, the IDR process began to stabilize following legal challenges from physician groups that led to new rules and revised guidance. As more providers started seeing success with IDR, many physician groups became more willing to engage.
“We gradually began ramping up our IDR efforts once the process stabilized and we started hearing others having success,” says Dr. Raley. “But, it’s still a work in progress, and there’s still a bit of a learning curve as we look for ways to scale these IDR efforts without expending considerable time and resources.”
Signs of Positive Change
Despite early frustrations, the IDR process is now showing positive results. Reports from professional organizations like the Emergency Department Practice Management Association show that providers are generally on the winning side of IDR decisions, which is helping to ease concerns about the amount of time and expense involved in the process.
“As more providers achieve favorable outcomes, our hope is that payers will return to the negotiating table for more equitable in-network rates,” explains Dr. Raley. “Ultimately, I think both payers and providers would prefer to avoid the added costs and administrative burdens of IDR, but it will take continued progress to drive meaningful change.”
If the IDR continues to work as intended, there’s mutual incentive for insurers and providers to reach in-network agreements– for insurers to control costs and for providers to avoid the friction of securing fair payment.
Why IDR Must Stay in Place
While IDR isn’t perfect, Dr. Raley warns that eliminating it would be disastrous for providers. Without IDR, there would be no structured process for providers to challenge underpayments except through costly legal battles—a path that is often unrealistic for small independent practices.
“While larger physician groups may have the resources to pursue legal action, smaller independent groups would face devastating financial consequences,” explains Dr. Raley. “Without IDR, many of smaller independent groups could be forced to cut staff or completely shut down.”
Dr. Raley encourages physician groups to stay involved and participate in the IDR process when necessary. “The goal of IDR is not just to settle disputes but to show payers that fair, contracted rates are in everyone’s best interest—both financially and for patient care.”
