Effects of the No Surprises Act on Healthcare

The Unintended Effects of the No Surprises Act on Healthcare

The No Surprises Act (NSA) was introduced to protect patients from unexpected medical bills when receiving care from out-of-network (OON) providers. While the law shields patients, it has unintentionally placed significant financial and operational burdens on healthcare providers.

Out-of-network providers must now:

• Provide cost estimates for routine services.

• Avoid balance billing for emergency services, air ambulance services, and non-emergency services provided by OON physicians at in-network facilities.

For these services, insurers reimburse providers directly, but providers must navigate the Independent Dispute Resolution (IDR) process to secure fair reimbursement. This has resulted in:

• Increased difficulty and delays in securing reasonable OON rates.

• Reduced leverage for providers during contract negotiations.

• A substantial rise in IDR disputes and legal challenges.

The Complexity of the NSA Process

The NSA introduced a detailed and bureaucratic process that providers must follow for dispute resolution. Strict timelines and administrative hurdles mean even minor errors can forfeit a provider's right to dispute rates.

Key NSA Process Challenges:

• Lengthy Timeline: Payments often take over a year from the time of service to resolution.

• High Administrative Burden: Providers face significant challenges managing disputes without advanced tools.

• Smaller Provider Disadvantages: Limited resources make it harder for smaller providers to engage effectively in the IDR process.

Even with an 80% win rate in disputes, these challenges create financial strain and uncertainty for providers.

Changing the Negotiation Landscape

Before the NSA, contract terminations between payers and providers carried significant risks for both parties. Providers could leverage balance billing to maintain negotiating power.

With balance billing now removed, payers face fewer consequences in termination scenarios. Routine care often shifts to in-network providers, and emergency services are reimbursed at reduced rates. This shift has weakened providers' bargaining power, allowing insurers to apply downward pressure on rates.

The Impact of Increased IDR Volume

Regulators initially estimated 20,000 disputes per year under the NSA. In reality, approximately 3,000 disputes are filed daily in 2024, with nearly 2 million disputes filed this year alone.

This surge in volume has overwhelmed the IDR system, leading to delays and backlogs that exacerbate provider frustrations and financial strain.

Conclusion

The No Surprises Act was intended to protect patients, but its unintended consequences have significantly impacted healthcare providers. To adapt to these changes, providers need efficient, scalable solutions that simplify NSA compliance and streamline the IDR process.

At Liminal Health, we specialize in helping out-of-network providers navigate the complexities of the No Surprises Act. Our proprietary software, NSA ClearPath, automates IDR workflows, reduces administrative burdens, and maximizes reimbursements.

Learn how Liminal Health can support your organization today