The No Surprises Act took effect in January 2022 with the goal of preventing surprise billing by implementing an independent dispute resolution process for payment disputes between payers and out-of-network providers.
Despite the law’s intention, some anesthesia providers say that insurance companies are still able to avoid or reduce payments for anesthesia services.
Where the law currently stands
For example, current law requires insurers to promptly pay physicians. If a physician or practice considers the payment to be inadequate, they can challenge it using the NSA’s IDR process. An independent arbiter then weighs in, and if they rule in favor of the physician, by law, the insurer must pay the physician or practice within 30 days.
However, Antonio Hernandez Conte, MD, the former president of the California Society of Anesthesiologists, told Becker’s that insurers still frequently delay the payment timeline.
“The No Surprises Act remains a continual burden for anesthesia practices as insurers delay payments for up to 90 or 120 days even if anesthesia groups are successful in the arbitration dispute resolution process,” he said.
Proposed revisions
The American Society of Anesthesiologists, along with the American College of Radiology and the American College of Emergency Physicians, echoed this sentiment in a July 24 news release shared with Becker’s. The release details the physician groups’ support for the No Surprises Enforcement Act, a legislative update that would fine payers that fail to pay physicians 30 days after losing the IDR process. The new legislation would impose a penalty three times the difference between the insurer’s initial payment and the IDR arbiter’s ruling per claim, which will also be subject to interest.
“Insurance companies taking advantage of flaws in the NSA system jeopardizes the sustainability of anesthesia practices, threatening access to care,” said ASA President Donald Arnold, MD. “This legislation would hold big insurance companies accountable and shows a continued bipartisan interest in improving the No Surprises Act system.”
Payment delays are just one of the strategies that payers are using to maneuver around payment requirements. Allyn Wilcock, CRNA, owner of Snoqualmie, Wash.-based Advanced Anesthesia Services and Northwest Healing and Wellness, said that the limitations that the NSA places on out-of-network rates for anesthesia services—designed to protect patients from surprise out-of-network costs—often skew in favor of insurers.
“Before the NSA, if we wanted to be out of network with the insurer, we would just not sign a contract. [Or if] we couldn’t come to an agreement on a fair reimbursement rate, we would just not sign a contract, and then we would bill them at what our going rate is, which is usually higher than our contracted rates,” he said. “Because we didn’t have a contract with them, they would essentially pay us at that rate, or a similar rate, which is usually fairly higher than a contracted rate. So it benefitted them to have us in-network, because we’d be contracted at a lower rate and couldn’t charge those higher rates.”
This can essentially strong-arm providers into becoming in-network with payers, according to Mr. Wilcock, further subjecting them to lower reimbursements.
“Now they can reduce their in-network rates or not increase them with inflation, because we really have no recourse anyway,” Mr. Wilcock said.
Advantages for large providers, payers
While providers do have access to the IDR process to resolve out-of-network reimbursement disputes, this process can also be long and may require legal counsel, another added strain on practice resources, especially for those that are smaller or independent.
A recent study published in Health Affairs found that while providers won between 83% and 88% of IDR cases in the first half of 2024, engagement with the IDR process has a high geographic concentration in Texas, Florida, Arizona and Virginia. This also “likely somewhat attributable to high concentrations of the provider organizations that most frequently used IDR,” according to the study.
Across most quarters, for example, more than half of the cases in Texas involved Radiology Partners’ affiliated providers, and two-thirds of Tennessee and Florida cases involved Team Health.
Recent legal proceedings spell an uncertain future
There have been several lawsuits filed recently by both payers and providers related to the NSA with mixed outcomes, demonstrating the growing tension surrounding the policy’s impact.
On May 30, a federal court in Texas granted the Texas Medical Association’s petition for a rehearing en banc in relation to a case initially filed by the TMA and several against HHS in November 2022. That case challenged various provisions of the NSA, particularly the inclusion of “ghost rates,” or contracted rates for services not actually furnished by a provider. However, no changes have been made to the IDR process as a result of the granted petition.
In June, the same federal court ruled in favor of insurers over air ambulance companies, ruling that the No Surprises Act does not grant a private right of action to enforce IDR awards in court unless there is clear evidence of fraud or misconduct. The court also ruled that third-party IDR entities are immune from lawsuits, providing insurers with legal protection against disputes over arbitration outcomes.
In May, Elevance Health, parent company of Blue Cross Blue Shield of Georgia, filed a lawsuit against billing company HaloMD, Hospitalist Medicine Physicians of Georgia, and Sound Physicians Emergency Medicine of Georgia, alleging the three organizations exploited the IDR process for financial gain. The lawsuit claims the disputes were falsely certified as eligible and structured to secure payments above market rates. Nearly 70% of disputes resulting in provider payments were allegedly not qualified for arbitration.
In a statement shared with Becker’s, HaloMD has denied all allegations and said it will “vigorously defend itself” in court. The company emphasized that it complies with IDR requirements and noted that recent federal data shows providers prevail in the majority of IDR cases.
“Despite the framework’s clearly defined structure and oversight mechanisms, certain payers have adopted tactics that create unnecessary confusion, increase administrative burden and undermine the integrity of the process,” the statement said. “In HaloMD’s experience, these tactics have not served to prevent misuse — they have functioned as deterrents to legitimate provider participation.”
In April, a New York federal judge dismissed an antitrust lawsuit against UnitedHealthcare and MultiPlan (now Claritev) that alleged the companies conspired to slash reimbursement rates to Long Island Anesthesiologists by more than 80% after the No Surprises Act took effect in January 2022.
Advocacy continues
Amidst the data showing that providers win the vast majority of IDR disputes and the slew of legal conflict surrounding the law, the ASA and its allies maintain that reform reform is still needed.
“Insurance companies must be held accountable to reimburse providers for the amount determined by the IDR process,” Alan Matsumoto, MD, chair of the ACR Board of Chancellors, told Becker’s in the July 24 news release. “Now, insurers are often not paying at all for these services provided to patients. This refusal trend may threaten the ability of practices to provide services in their communities and restrict patient access to care that the NSA was supposed to protect.”
“[The No Surprises Enforcement Act] takes critical steps to stop insurer bad practices,” Alison Haddock, MD, president of ACEP added. “The games insurers play have real consequences for physicians and patients, especially in rural and underserved communities. ACEP strongly applauds the introduction of this legislation and urges its prompt passage to make sure that insurance companies are not given a free pass to skirt the law and avoid their payment obligations.”
