Key facts
- Major US companies warn that the No Surprises Act is leading to higher health insurance premiums.
- The ERISA Industry Committee, representing large employers, is lobbying for reforms to the law.
- The committee claims arbitration costs under the act have surged, forcing businesses to pass costs to employees.
- Doctors initiated 2.6 million disputes last year, significantly more than the 22,000 anticipated by Congress.
- Arbitration costs reached over $16 billion last year, more than triple previous spending.
- Some employers have reported dispute payments doubling year-over-year.
America's largest companies are warning Congress that the 2020 No Surprises Act, designed to protect patients from unexpected medical bills, is inadvertently driving up health insurance premiums. The ERISA Industry Committee, whose board includes executives from major corporations like ExxonMobil, Lockheed Martin, PepsiCo, and Walmart, is lobbying for reforms, arguing that escalating arbitration fees are forcing businesses to pass costs onto their employees.
James Gelfand, CEO of the committee, stated that if Congress cares about health insurance costs, this is a critical test. The committee represents large employers that self-fund their health plans. They have intensified lobbying efforts, releasing a report and hosting briefings on Capitol Hill to advocate for changes to the law.
The No Surprises Act was intended to prevent patients from being charged high out-of-network rates for emergency care. It created an arbitration system for doctors to appeal insurance payments. However, this system has led to a surge in disputes, with doctors initiating 2.6 million disputes last year, far exceeding the 22,000 anticipated by lawmakers. Arbitration costs have surpassed $16 billion annually, more than tripling spending.
Examples cited include a plastic surgery practice awarded $440,000 for a breast-reduction surgery that typically costs no more than $25,000, and a surgical assistant winning $210,000 for a facial feminization surgery where the in-network surgeon earned $12,767. Doctors, however, argue that insurers often refuse to pay, and physician lawmakers like Rep. Greg Murphy (R-N.C.) are sympathetic to their position. Murphy stated that insurers are misleading employers about the cause of rising costs.
Patrick Velliky of HaloMD, a firm that helps doctors file disputes, blamed insurers' "willful non-compliance" and poor initial estimates for the dispute numbers. Richard Heller of Radiology Partners, another large filer, called high awards "rare" and argued that most No Surprises Act claims are settled without arbitration. A Centers for Medicare and Medicaid Services report indicated that complaints about doctors related to the act were more than three times higher than those about insurers.
Insurers complain that doctors file claims for non-emergency services and fail to provide good-faith estimates, while doctors accuse insurers of not complying with pricing requirements and delaying payments. Both House and Senate committees are considering legislative next steps, with Senate HELP Committee Chair Bill Cassidy (R-La.) convening discussions. Employers are pushing for reform, citing significant increases in dispute payments that are impacting their budgets and forcing sacrifices for employees.