LUGPA Policy Update: Effectiveness of the No Surprises Act

Sept. 2024

The No Surprises Act (NSA), enacted on January 1, 2022, represents a critical reform to protect consumers from unexpected healthcare costs arising from surprise medical bills. These bills typically occur when patients receive care from out-of-network providers or facilities, often during emergencies or elective procedures.

Key Provisions

The NSA addresses three primary scenarios:

Emergency care provided by out-of-network facilities or providers.
Emergency air-ambulance transportation services.
Nonemergency care at an in-network facility by an out-of-network provider.

A central feature of the NSA is its prohibition of balance billing, ensuring that patients are not held financially responsible for costs beyond what they would incur for in-network care.

Independent Dispute Resolution (IDR) Process

The NSA establishes an Independent Dispute Resolution (IDR) process to resolve payment disputes between healthcare providers, insurers, and consumers. This mechanism aims to facilitate fair negotiations when parties cannot agree on reimbursement amounts.

Recent Data and Enforcement Actions

Recent data released by the Centers for Medicare & Medicaid Services (CMS) highlights significant enforcement efforts and consumer protections under the NSA:

By the end of June, federal regulators received over 12,000 complaints related to NSA noncompliance, resulting in more than $1.7 million in restitution to consumers and providers from closed complaints.
The most common complaints against providers included surprise billing for emergency and nonemergency care, while health plans often faced allegations of incorrect calculation of Qualifying Payment Amounts (QPAs).

Challenges and Controversies

Despite its benefits, the implementation of the NSA has encountered challenges:

Disputes over QPAs have led to numerous lawsuits, with providers alleging that insurers set unfairly low QPAs to reduce payments for out-of-network services.
Delays in payments after IDR decisions have been a significant source of frustration for healthcare providers, contributing to a backlog in claims and stress on the dispute resolution system.

CMS Oversight and Future Directions

In response to the complexities and complaints, the CMS conducted its first audit of insurer compliance with the NSA, revealing issues such as CVS Aetna's inaccurate QPA estimations in Texas. Regulators continue to monitor and adjust enforcement strategies to improve compliance and protect consumer rights.

LUGPA supports ongoing efforts to strengthen the NSA, advocating for improved transparency and fairness in billing practices while recognizing the law's role in preventing millions of surprise bills. As discussions and adjustments continue, LUGPA remains committed to ensuring that healthcare policies promote patient well-being and provider sustainability.

For more information on LUGPA's work on the NSA, please visit LUGPA's No Surprises Act Hub.