The No Surprises Act:  a bill long overdue

Reducing health care costs is voters’ top priority for both Congress and President Joe Biden, according to a poll released this summer. Congress has no lack of solutions being bandied about to address those costs. The problem, as with many issues in our polarized era, is reaching an agreement on the details.

That’s what made bipartisan agreement 11 months ago on the No Surprises Act so unusual. Congress voted to protect patients from surprise medical bills by taking them out of the middle of payment disputes between out-of-network providers and insurers. The law goes into effect on Jan. 1, 2022, not a moment too soon for the millions of Americans overwhelmed by medical bills.

Even before COVID-19 sent us running for tests and treatment, more than two-thirds of patients worried about getting a surprise medical bill they couldn’t afford. That’s a legitimate concern: there’s a one in five chance we’ll be hit with a surprise medical bill after receiving care in a hospital or emergency room. We only find out that these providers and services aren’t covered by our insurer after the fact — when we’re home recovering and a surprise bill of hundreds or even thousands of dollars arrives. 

A broad coalition of consumer and patient groups supported the final compromise language in the No Surprises Act because it codifies two important cost-saving measures: It bans balance bills from most out-of-network providers, and it sets up an arbitration system with guardrails to help keep overall costs down for all privately insured Americans.

The most recent proposed rule to implement the law, released on Sept. 30, 2021, is key to ensuring fair, not artificially inflated, payment to out-of-network providers, as intended by Congress. The No Surprises Act defined an arbitration process that incentivizes all parties to negotiate based on market conditions in that geographic area and on the care provided to the patient. Arbiters are directed to primarily consider the average in-network rate, dubbed the “qualified payment amount (QPA),” in making their decisions for payment awards. Using the QPA as a starting point for paying out-of-network providers is a crucial part of the law because it will work to not only pay providers fair rates, but also hold down costs that could be shifted to consumers in higher premiums.

Such incentives are the only way this law will yield the savings forecasted by the Congressional Budget Office, which predicted that making out-of-network payments more reasonable would reduce premiums by 1 percent. Those savings have been allocated in advance to “pay for” other elements of the Consolidated Appropriations Act of 2021.

While providers and insurers are quibbling over these rules, we sent a letter to Cabinet Secretaries Xavier Becerra, Marty Walsh and Janet Yellen (last week) commending them on staying true to the consumer-centered goals of the Act. 

Millions of insured Americans are anxiously waiting for the No Surprises Act to go into effect, complete with the rules that clarify its arbitration clauses. The bill was one of the few things both congressional chambers and both parties agreed to last year. It’s past time to end the unfair practice of surprise billing that costs patients hundreds to thousands of dollars and drives up our premiums. Finalizing strong arbitration rules before Jan. 1 can help make that happen.

Patricia Kelmar, J.D., is campaigns director of U.S. PIRG Health Care.