Dive Brief:
- Prices for some healthcare services after arbitration under the No Surprises Act were much higher than the same in-network commercial prices before the law was passed, according to new research out this week.
- In 2024, prices for imaging after arbitration were 767% higher than average prices in Medicare. For comparison, the same imaging prices were roughly 200% higher than Medicare prices before the No Surprises Act was passed, according to an analysis published by the Brookings Center on Health Policy.
- Arbitration decisions in emergency care, imaging and pediatric critical care tended to skew more closely to amounts that providers offered during negotiations, rather than those offered by insurers, according to the analysis.
Dive Insight:
The No Surprises Act went into effect in 2022, in an attempt to protect patients from unexpected — and often high — medical bills if they received out-of-network care at in-network facilities.
The law set up an arbitration process, called indepenent dispute resolution, to resolve pricing disputes between insurers and providers to avoid saddling patients with those bills. The “baseball-style” arbitration process dictates that providers and insurers each submit an offer to pay for a healthcare service and a government-certified arbitrator picks one one of those prices.
But the dispute resolution process, or IDR, has been plagued by lawsuits and accusations from both insurers and providers that the process unfairly favors the other side.
Providers say insurers are submitting arbitrarily low offer amounts, and insurers say providers exploit the arbitration process to get higher reimbursement, given that providers win the vast majority of disputes.
The Brookings analysis, which used government data from 2024 and some periods in 2023, shows that, contrary to the NSA’s goal, some healthcare prices after the law’s arbitration process were higher than before the law was passed.
Prices for emergency, imaging and pediatric critical care after arbitration in 2024 were all higher than in-network price estimates before the NSA was enacted. Some prices post-arbitration were even higher than average out-of-network amounts in 2024, including those in imaging and pediatric critical care.
Average prices decided by arbitrators skewed more closely to those offered by providers, who won the vast majority of arbitrations and submitted payment offers much higher than mean in-network commercial prices.
For example, the average imaging price in 2024 after arbitration was 767% higher than Medicare. That final price was much closer to providers’ average offers — at almost 850% more than Medicare — compared to insurers’ offers of roughly 262% more. Providers won more than 90% of imaging decisions that year.
In contrast, insurers’ average amounts skewed more closely to the qualified payment amount, a price based on the median contracted rate in a geographic area that’s used in arbitration decisions. The QPA has been heavily contested and litigated by providers, who claim insurers artificially depress the metric to influence arbitration.
In 2024, mean QPAs in emergency care, imaging and pediatric critical care were lower than average in-network prices before the NSA went into effect. Consequently, offers submitted by insurers were much lower on average than providers’ offers.
Brookings’ analysis also gives insight into the providers filing most NSA arbitrations.
Team Health and SCP Health, both private equity-backed staffing firms, filed the majority of emergency care line item claims during arbitration. Team Health accounted for 33.5% of emergency care line items while SCP Health accounted for 32%.
Private-equity backed Radiology Partners filed over 90% of arbitration line items for imaging services. The provider has faced multiple lawsuits from insurers who argue the company floods arbitration with claims, including one brought by Aetna that was dismissed by a federal judge last week.
Brookings research compliments other studies that have found the No Surprises arbitration process raises healthcare costs. One study published in Health Affairs last year found that IDR created an estimated $5 billion in costs between 2022 and 2024, which could eventually result in higher insurance premiums for consumers.
