Key facts
- The No Surprises Act, enacted in 2020, aimed to eliminate unexpected medical bills for patients.
- The law's arbitration system for out-of-network medical disputes has been overwhelmed with claims, far exceeding initial projections.
- Arbitrators have awarded doctors significantly higher amounts than typical service costs, leading to accusations of a "gold rush."
- Insurers claim they are losing a high percentage of arbitration cases and face pressure to raise premiums.
- Doctors advocate for increased penalties against insurers who do not pay arbitration awards, while insurers push back against proposed legislation.
- A legislative impasse persists due to conflicting interests between the medical and insurance industries.
Congress is facing a significant challenge in amending the No Surprises Act, a law enacted in 2020 to protect patients from unexpected medical bills from out-of-network providers. The arbitration system established by the law, intended to resolve payment disputes between doctors and insurers, has become overwhelmed with millions of claims annually, far exceeding initial projections.
This surge has led to arbitration awards for physicians that are sometimes vastly larger than the typical cost of services, such as a $440,000 payout for a breast reduction surgery that normally costs $15,000 to $25,000. Insurers argue this has created a "gold rush" and is putting pressure on them to raise premiums. The New York Times and Wall Street Journal have detailed instances of doctors allegedly gaming the system, with one case involving a surgeon's assistant wife receiving a $210,000 award for assisting with a procedure for which her surgeon husband earned $12,767. Overall arbitration judgments reportedly tripled last year to $15 billion.
Doctors, represented by lobbying groups like the American Medical Association, contend that insurers are not paying arbitration judgments and are instead slowing down or ignoring decisions without significant consequences. They support proposals like Rep. Greg Murphy's (R-N.C.) bill, which would increase penalties for insurers failing to pay arbitration awards. This bill, co-sponsored by Rep. Raul Ruiz (D-Calif.), has support from other doctor-members of Congress, including Sens. Roger Marshall (R-Kan.) and Bill Cassidy (R-La.).
However, the insurance industry and its allies are strongly opposing these measures. The Coalition Against Surprise Medical Billing has launched an ad campaign criticizing the proposed penalties, and major employers like Microsoft and Dow have written to Congress expressing concerns that the legislation would reward bad actors. Insurers argue that many claims submitted for arbitration are ineligible and point to surveys suggesting a high percentage of disputes should not have gone to arbitration in the first place. Some lawmakers are considering an alternative approach: scrapping the arbitration system entirely and relying on a benchmark rate tied to in-network prices, a solution doctors previously opposed due to fears of insurers manipulating those rates.
The impasse highlights the difficulty Congress faces in resolving issues where powerful, opposing interests have significant stakes, potentially paralyzing future legislative efforts.