Dive Brief:
- After federal legislation protecting consumers from surprise medical bills was implemented, a growing number of medical claims were in network, according to a new analysis.
- The No Surprises Act went into effect on Jan. 1, 2022. From the fourth quarter of 2021 to the first quarter of 2022, in-network care as a percentage of all claim lines nationally increased 2.3%, according to the study by nonprofit Fair Health.
- It’s the latest research suggesting No Surprises has been successful in lowering the amount of unexpected out-of-network bills, though the rollout of the law has been tied up in lawsuits, and regulators currently face a backlog of billing disputes between payers and providers.
Dive Insight:
Surprise billing — when consumers are unexpectedly hit with a medical bill, usually after a service they thought was covered by their insurance — has been rampant in recent years despite state efforts to curb the practice. Among large group health plan enrollees, one in five emergency room visits and one in six admissions to an in-network hospital led to a surprise medical bill, according to research from 2020 and 2019, respectively.
No Surprises was passed in 2020 in a bid to ameliorate the financial burden of surprise bills on consumers. The law requires health plans and providers to negotiate payment for out-of-network care between themselves, holding patients blameless for surprise bills.
Despite the law’s bumpy implementation, research suggests No Surprises has been successful in reducing out-of-network claims.
For its analysis, Fair analyzed private healthcare claims records from 2019 to 2023, which includes the first two years after No Surprises took effect. The study focuses on services in facility settings like hospitals or emergency rooms, and zeroed in on four specialties that traditionally yield high volumes of out-of-network bills: anesthesia, emergency medicine, pathology and radiology.
Fair found the majority of services were in-network both before and after No Surprises took effect, but that the implementation of the law corresponded with an increase in in-network bills.
From the first quarter of 2019 to the third quarter of 2023, in-network care as a percentage of all claim lines increased 7%, according to the study.
That growth was smaller but still apparent when researchers narrowed their focus to anesthesia, emergency medicine, pathology and radiology. Those specialties had an increase in in-network care of 4.7% from 2019 to 2023.
Emergency medicine had the greatest increase in in-network care (13.2%) while pathology had the smallest (0.6%).
Fair also found a widening gap between the billed amount, or the amount providers charged a patient, and the allowed amount, the final fee negotiated between a payer and a provider for a service. The allowed amount includes what’s being paid by the patient and what’s being paid by the plan.
From 2019 to 2023, allowed amounts as a percentage of billed amounts for out-of-network services fell 9.6%. The decrease was even larger for in-network services, at 14.3%.
As a result, the ratios of allowed to billed amount for in-network and out-of-network services crept closer together from 2019 to 2023. That suggests allowed amounts, or what patients and payers are actually paying for medical care, for out-of-network services are lowering closer to in-network levels.
It’s an encouraging sign that No Surprises may be mitigating exorbitant out-of-network payments, though it’s too early to determine the law’s effect on the broader healthcare payment landscape.
For example, recent CMS data finding arbiters are selecting the higher payment offer in billing dispute determinations suggests the law might actually raise consumers’ premiums, even while shielding them from surprise bills.
