No Surprises Act Arbitration Process Is A ‘Big Mess,’ Senate Tells HHS At Hearing

The arbitration process in the No Surprises Act, which was enacted to make the health care system more transparent, has become “a big mess,” a U.S. senator said last Wednesday at a Senate Finance Committee hearing.

The U.S. Department of Health and Human Services recently resumed determinations, after pausing in early February following a federal court decision in Texas.

“We’re seeing lawsuit after lawsuit from providers; insurers aren’t responding in a timely manner or sometimes not at all; and even when the payment determinations are won by providers, payers still don’t pay providers after the statutory deadline,” Sen. Michael Bennet, D-Colo.

Xavier Becerra, secretary of the U.S. Department of Health and Human Services, blamed an unexpectedly high volume of arbitration claims, many of them frivolous, for the backlog. “Everyone’s just filing all sorts of claims, and these arbitrators are trying to figure out what cases to handle,” Becerra testified at the hearing. “That’s what’s bogging down the system.”

The No Surprises Act got off to a robust start in 2022, preventing 9 million surprise bills in the first nine months of the year. However, regulators were not prepared for the volume of arbitration claims.

“Federal agencies thought there would be about 17,000 arbitration experiences last year,” said Ryan Work, senior vice president, government relations, for the Self-Insurance Institute of America. “Instead, 90,000 claims were disputed, and they had a huge surprise of their own at the end of the day. Saying the portal and the regulators are overwhelmed is an understatement.”

The high number of ineligible claims contributed to the bottleneck. Out of more than 41,000 disputes challenged for eligibility during that period, 21,000 were closed. “You are seeing a huge number of claims going in, very few actually closed and a huge number declared ineligible,” he said.

The Texas Medical Association has filed several lawsuits arguing that HHS has gone against congressional intent when implementing the arbitration process. The association has argued that the regulations implementing the law called for the arbiter to put too much weight on the qualifying payment amount, which is the average geographic rate for a service.

Although the agency is staying true to Congress’ intent with the law, Becerra said legislative action is needed to deal with the high number of claims.

“What we’re trying to do is have a system that works,” he said. “I plead with you to help us make sure that we get to the legitimate cases so a provider that’s looking for real payment, or an insurer that’s saying, `You’re asking for too much,’ we can adjudicate that.”


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