While data released earlier this week raised questions about the administrative costs associated with No Surprises Act (NSA) arbitrations, a second study suggests the legislation is working to reduce out-of-pocket costs for members.
Researchers at Harvard University and Mass General Brigham examined a sample of 17,351 privately insured adults, 8,204 of which lived in states that gained protections against surprise billing thanks to the legislation. The remaining 9,147 lived in states where some kind of program was already in place to protect consumers against these costs.
The study found a significant decrease in out-of-pocket spending for people living in the new intervention states. The study attributes savings of $567 in yearly out-of-pocket costs to the protections.
In fact, the study suggests that these protections are leading to greater savings for consumers than other policy changes such as Medicaid expansion and the drug pricing policies under the Inflation Reduction Act (IRA). Expanded Medicaid was tied to a $152 decrease in annual out-of-pocket spending, while the IRA is estimated to drive $400 in savings each year for people with Medicare Part D coverage.
“Our study findings support anecdotal reports that the NSA has successfully shielded patients from surprise billing,” the researchers wrote.
They noted that a survey from the Blue Cross Blue Shield Association released in early 2024 projects that the NSA averted 10 million surprise bills in the first nine months of 2023 alone.
That said, the study said potential decreases to premiums, which the Congressional Budget Office estimated could be between 0.5% to 1%, have not materialized. The NSA was designed with the expectation that most disputes would resolve with the qualifying payment amount, which is primarily based on the median in-network rate.
However, data suggest that providers have won 85% of disputes since the fourth quarter of 2023, and, in these scenarios, the median payments were three times higher than the established QPA. The study also notes that the majority of these disputes are filed by a small number of providers that are backed by private equity firms, and they tend to win higher rewards in the resolution process.
When insurers win a dispute, by comparison, the payout tends to hew more closely to the established QPA, the study said.
Regulators could intervene by making the QPA more prominent in the dispute resolution process or by implementing benchmarks that are based on negotiated prices made public via price transparency requirements.
“Additional regulations are needed to prevent the shifting of this profiteering business model from patients to the broader insurance pool,” the researchers said.
They add that additional research in the future will be necessary to determine the impact the law is having on utilization and healthcare costs more broadly. Though it did lead to a significant reduction in unexpected, out-of-pocket costs, it hasn’t had a major impact on high-burden medical costs.
The researchers recommend several policy changes that could address some of these gaps. For one, its protections could be extended to ambulance services, which is a significant source of surprise medical bills.
In addition, efforts to improve healthcare literacy and better inform patients of the protections in place could avert additional charges. Patients with lower education levels who received an unexpected medical bill were less likely to reach out to billing offices and secure relief.
“Efforts are required to increase public awareness of NSA related protections, assist patients with surprise billing complaints, and enforce penalties against providers who violate the law,” the researchers wrote. “Policy makers may also need to explore other strategies to alleviate the burden of high healthcare spending and medical debt, particularly among socioeconomically disadvantaged patients.”