Brookings Analysis Finds No Surprises Act Arbitration Increased Healthcare Prices in 2024
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TL;DR
- Brookings analysis found post-arbitration healthcare prices under the No Surprises Act rose above pre-law in-network prices.
- In 2024, imaging service prices after arbitration were 767% higher than Medicare rates.
- Providers won the majority of arbitrations and their offers influenced final prices more than insurers' offers.
- Major filings came from private equity-backed staffing firms and radiology providers.
Overview
A recent analysis by the Brookings Center on Health Policy, using federal data from 2023 and 2024, found that after the introduction of the No Surprises Act (NSA) and its arbitration process for resolving payment disputes between healthcare providers and insurers, prices for some medical services increased significantly. The analysis highlights that post-arbitration prices for emergency care, imaging, and pediatric critical care surpassed pre-NSA in-network commercial rates, with decisions tending to favor providers' higher payment offers.
What Happened
The No Surprises Act, implemented in 2022, sought to protect patients from unexpectedly high bills by introducing an independent dispute resolution (IDR) process, or 'baseball-style' arbitration, where providers and insurers submit offers and an arbitrator selects one.
According to Brookings, average imaging prices after arbitration in 2024 were 767% higher than Medicare rates, compared to pre-law in-network imaging rates at roughly 200% of Medicare.
Providers won more than 90% of imaging arbitrations and their payment offers, much higher than insurers', reflected in the final awards.
Majority of arbitration filings were from private equity-backed staffing groups like Team Health and SCP Health for emergency care, and Radiology Partners for imaging, with the latter responsible for over 90% of imaging arbitration claims.
Context
The NSA was introduced in response to patient complaints about surprise bills when receiving out-of-network care at in-network facilities, aiming to shift payment disputes away from patients through arbitration between insurers and providers.
The arbitration process and its central metric-the Qualified Payment Amount (QPA)-have been contentious, with providers arguing it unfairly lowers reimbursements, while insurers claim providers use arbitration to push up rates. Litigation over the arbitration process and QPA calculations continues.
Why It Matters
- The analysis indicates that the NSA's arbitration process, intended to control out-of-network payments and protect patients, may have contributed to higher healthcare service prices.
- These increases may lead to higher insurance premiums, as prior research has shown the arbitration mechanism added billions in system-wide costs.
Sources
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Prices rose after No Surprises arbitration for some care: analysis
finance.yahoo.com