No Surprises Act results in more disputes than expected

On Dec. 27, 2020, the No Surprises Act was signed into law as part of the Consolidated Appropriations Act of 2021 and took effect Jan. 1, 2022. These provisions were intended to address unexpected gaps in insurance coverage that result in “surprise medical bills” when patients unknowingly obtain medical services from physicians and other providers outside their health insurance network.

More than two years after No Surprises was enacted, 10 million consumer health claims were protected from unexpected bills. But the independent dispute resolution process is being used more than expected, and eligibility disputes are complex.

That was the word from a recent Manatt Health webinar which provided an update on the latest litigation, enforcement, IDR and implementation challenges since the No Surprises Act took effect.

10M health claims protected from unexpected bills

Blue Cross Blue Shield Associates and AHIP conducted a survey that showed not only were 10 million health claims protected from unexpected bills since the act became law, but the provider accepted the initial payment in 79% of NSA-eligible claims. Twenty-four percent of NSA-eligible claims entered the open negotiation process while 7% of eligible claims were submitted to the IDR process.

“The IDR process is where most of the controversy has been happening,” said Harvey Rochman, litigation partner in Manatt’s health care division.

The IDR process has been marked by an unexpected volume and complexity of disputes, he said. More than 334,000 claims were filed between April 15, 2022, and March 31, 2023, which was far above the original estimate of about 17,000 claims filed annually. It is projected that 420,000 claims will be filed in 2024. In addition, there is a backlog of 300,000 cases waiting to be determined as of June 2023.

The No Surprises Act has had the largest impact on emergency claims, Rochman said. Emergency had the lowest percentage of in-network claims among various medical specialties but has been increasing. Meanwhile, in-network pathology claims peaked in the third quarter of 2023 and are falling but in-network anesthesiology and radiology claims continue to hold the highest percentages of in-network claims.

Some requirements are delayed

The U.S. Department of Health and Human Services has delayed some requirements of the No Surprises Act, pending regulations and technical solutions, said Steve Chiu, partner at Manatt Health. Those delayed requirements include:

• Good faith estimates and advanced explanations of benefits for insured patients, which are delayed pending rulemaking.
• Co-provider cost estimates in good faith estimates for uninsured or self-pay patients, which are delayed pending rulemaking.
• Plan/issuer internet-based price comparison tool, which must allow an individual to receive an estimate of their cost-sharing responsibility for a specific item or service from a specific provider.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on X @INNsusan.

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Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].