It seems simple: Established in 2022, the No Surprises Act seeks to limit the amount of out-of-pocket expenses that patients might get stuck with when their insurance company is out of network with their hospital.
Insurers and hospitals contract regularly to determine what the insurance company will pay when a member receives services from the provider. But if the two parties don’t have a contract, the insurer often refuses to cover the care, and the patient gets stuck with the bill.
The No Surprises Act restricted this process and created an arbitration process for insurers and hospitals to determine fair payment for out-of-network services.
But according to a new Bloomberg Law article, the arbitration process isn’t faring very well for providers.
Here’s how it works: Health insurers are required by law to make payments within 30 days of a final determination by an arbiter. Unfortunately, providers are claiming that insurers are not making timely payments, leading to an increasing number of lawsuits from providers, notes Bloomberg Law.
To make matters worse, some would argue that the system itself was set up in favor of insurers. When the arbitration process was outlined, the rule required payment amounts to rely on the median in-network price for the service. This incentivizes insurers to push higher-paid providers out of network to drive down that median rate.
Yet even with that “thumb on the scale,” insurers are still not paying what the arbitration decides they should pay. In fact, Bloomberg Law cites a survey of 48,000 physicians across the US, which found that 52 percent of payments were not being remitted by insurance companies at all.
No wonder providers are fed up.
“The problem we face is that the insurance companies think that they can pay the award at any time they want, many months after it was due, and that they don’t owe any additional money,” said Adam Schramek, a partner with Norton Rose Fulbright US LLP, who represents plaintiffs in a lawsuit that is believed to be the largest of its kind: Guardian Flight LLC v. Aetna Life Insurance Co. In this lawsuit, Aetna and Cigna collectively failed to pay more than $3 million in independent dispute resolution (IDR) awards to four air ambulance companies.
Government agencies aren’t holding insurers like Aetna and Cigna accountable. So, unfortunately, it’s left to litigation.
