No Surprises Act Arbitration Outcomes: Providers Prevail in Majority of Cases, Brookings Data Shows
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TL;DR
- Brookings databook analyzes 2023 No Surprises Act arbitration outcomes.
- Providers win at least 80% of arbitrations, often with awards far above Medicare rates.
- Decisions commonly exceed historical in-network and out-of-network prices.
- Large provider groups dominate the dispute resolution process.
Overview
A new Brookings Institution databook analyzes outcomes from the No Surprises Act's independent dispute resolution (IDR) arbitration process for calendar year 2023. The study examines trends in arbitration results, reimbursement rates, and dominant participants in disputes involving emergency, imaging, and neonatal/pediatric care services.
What Happened
The Brookings Institution published a databook evaluating CMS data on No Surprises Act arbitrations for 2023, focusing on three main service categories: emergency care, imaging, and neonatal/pediatric critical care. The analysis reviews arbitration outcomes, offer patterns, and the resulting payment amounts, comparing these to Medicare and historical in-network rates.
Providers won at least 80% of arbitrations, with arbitrators often choosing provider-submitted offers over insurer proposals. The mean award for emergency services in the second half of 2023 was 4.0 times Medicare rates-higher than previous in-network commercial payments, which averaged 2.6-3.0 times Medicare.
Outcomes for imaging services were even more pronounced. In the latter half of 2023, arbitrated prices averaged 6.6 times Medicare rates, up from 5.0 times earlier in the year, and well above both historic in-network (1.9-2.5x) and out-of-network (2.9-3.3x) payment benchmarks for similar services.
A small number of large, investor-backed provider groups-specifically TeamHealth, SCP Health, Envision Healthcare, and Radiology Partners-were responsible for 74% of all line items in the arbitration sample, indicating a concentration of disputes among the largest players.
The Brookings analysis also highlights that the qualifying payment amount (QPA), an insurer-calculated median benchmark, currently runs more than 30% below historical in-network rates, and arbitrated awards often exceed both QPA and pre-law averages.
Context
The No Surprises Act established an arbitration (IDR) process to resolve payment disputes between medical providers and insurers over out-of-network care. Policymakers expected arbitration to curb rising costs by generally aligning payments with the median in-network rate (the QPA).
Contrary to early projections, the Brookings report suggests that arbitration outcomes are now driving reimbursed amounts above historical in-network and out-of-network rates, especially for high-profile categories like emergency and imaging services. The anticipated reduction in premiums and payments has not been realized.
Why It Matters
- The findings indicate that the IDR process under the No Surprises Act may be leading to increased reimbursements for providers, potentially raising premiums for patients and payers.
- The heavy participation of large, investor-backed medical groups in the arbitration process could have implications for market dynamics and the sustainability of the IDR system.