The Implications and Limitations of the No Surprises Act

The Implications and Limitations of the No Surprises Act

With the No Surprises Act (NSA) set to go into effect on January 1, many consumers are rejoicing at the prospect of no more unexpected medical charges from out-of-network providers. However, it is crucial to examine the potential unintended consequences and details of this new legislation.

While the NSA aims to alleviate the burden of unexpected medical bills, the reality may be more complex. Chief among the concerns is the inclusion of ambulance services in the legislation. Paying 700 to 2000 for ambulance services is seen as an "insane" practice by many, as taxpayers have already paid for these services through their contributions to the salaries of emergency responders, their equipment, and the ambulances themselves.

Public Service and Unintended Consequences

Despite the NSA's intentions, the law itself is criticized for lacking enforcement mechanisms. The consumer/patient remains largely on their own, and the government is not expected to enforce the law effectively. Moreover, the insurance cartels and providers may find ways to undermine the NSA by getting their customers to waive their NSA protections.

Compliments and criticisms aside, the full implications of the NSA will unfold as the law is implemented. For instance, the third interim final rule issued on November 17, 2021, addresses various aspects such as prescription drug and health care spending, including information on the most frequently dispensed and costliest drugs, enrollment, and premium information. It also mandates good-faith estimates from providers for scheduled health care services and establishes patient-provider payment dispute resolution processes.

The Cost of Implementation

The NSA's requirement for private health plans to cover out-of-network claims and apply in-network cost sharing may lead to higher premiums. This is because out-of-network claims cost more, leading to increased claims costs. Premiums are based on claims, administrative costs, and taxes, so any increase in out-of-network costs would naturally drive premiums up.

Furthermore, the NSA adds layers of complexity, such as the process for determining payment amounts for surprise out-of-network medical bills, which includes negotiations between plans and providers, and an independent dispute resolution (IDR) process if negotiations fail. This adds to claims costs, which ultimately increases premiums.

Post-Emergency Stabilization Services

The NSA also includes provisions for post-emergency stabilization services. Emergency services now extend to post-stabilization care provided in a hospital following an emergency visit. To receive post-stabilization care, patients must give written notice and consent to be transferred to another in-network facility. If a patient refuses, they may face higher bills as a result.

The federal government estimates that each year, 4.1 million emergency department visits result in a hospital admission, with about 16% (about 660,000) involving at least one out-of-network claim.

In conclusion, while the No Surprises Act is a step in the right direction, it is imperative to carefully monitor and address any unintended consequences. The law's implementation will require full transparency, robust enforcement mechanisms, and a close watch on premium rates and dispute resolution processes.