Another significant shortcoming of the No Surprises Act is that it does not cover Medicare Advantage Plans. If you are on an Advantage Plan, you are required to follow an arbitration process that is basically an arm of the insurer. I know this from personal experience.
MDs treat and heal people. MBAs extract as much profit from healthcare industry as possible while offering nothing in return. Which side will always ultimately win a battle over $ in this scenario? MBAs have nothing, like say, savings lives, to distract them from their sole focus. Get the foxes out of the henhouse. Of course MBAs believe fee for service structure means that doctors will over-treat patients. They cannot imagine a job that involves a mission more valuable than money. Get the corporate middlemen out of healthcare.
I've received late payments from insurance companies. It is usually a dollar or two. Literally, not figuratively. They will send me a check for 1.23$, or something of that nature, for claims that they admitted to delaying for over a year. Watch how the legislation is crafted and then implemented, keeping a close eye on who is receiving lobbying dollars. These companies will always find a way to cheat.
For the union, multiemployer plan I have managed for over 15 years - we started using reference based pricing for hospitals about 9 years ago - and we pay at least 140% of Medicare with that. But for nonhospital providers we use payments that always exceed Medicare by at least 10 to 25% and well over 95% of providers gladly accept that amount. We have had only one case go all the way to IDR and that was for an air ambulance claim.
But a handful of very high priced hospitals are constantly complaining that we should be paying closer to 300% of Medicare to "cover their costs and the shortfalls from Medicare and Medicaid. But we look at the cost reports they file and those cost reports seldom exceed 120% of Medicare. And we find many of the same hospitals are accepting our payments using the same methodology and only complaining about some claims while the payments we make on other claims are at least mildly contested.
We are not an insurance company, not a TPA, and do not use AI or other automated approaches - just a lot of direct human oversight. So we may be different than the UnitedHealthcares and BUCAs but we also find that some providers aggressively price.
As long as the arbitration system does not disclose the evidence used by both sides there will always be suspicion as to the validity of the arbitrator's decision(s).
“ But a handful of very high priced hospitals are constantly complaining”… so these are MBA v MBA battles? as in not MDs v MBA? that sounds right. all rent-seekers. need a federal ban on the corporate practice of medicine.
Government intrusion by fixing prices for Medicare, Medicaid and VA beneficiaries, designed to buy votes, prompts providers to demand much more than 140% of Medicare allowable. Keep in mind that 140% of Medicare Allowable is likely 200+% of Medicaid Allowable in many states.
By the way, 140% of Medicare Allowable is a reasonable estimate of the actual cost of hospital services, plus a modest margin of "profit" for most "not-for-profit" hospitals.
If Americans whose coverage does not qualify for government price fixing want to see their cost of coverage and out of pocket spend reflect the actual cost of the services they receive, it is long past time for members of Congress to change their vote buying ways of price fixing. Most recent example? The so-called Inflation Reduction Act and Rx.
But, why aren't physicians and hospitals and the author of the initial post (above) targeting the source, the "root cause" of the gamesmanship in health care ... the governments who fix their reimbursements substantially below their actual cost to deliver services?
Employers will be off the hook of for- profit private insurance industries with passing Medicare For ALL Acts that were re-introduced (April 29th) by members of both the house and senate of the United States
No. Look to Vermont's single payer design - which estimated the cost would require substantial employer and worker income taxes (20+% in some cases). They looked at those funding levels and decided, upon further analysis and reflection, that even 20+% top marginal rates of income taxation would be insufficient to fund the new entitlement program.
That such high levels of income taxation would be insufficient shouldn't be a surprise since Health Care spend in America is 18+% of Gross Domestic Product (GDP) - where GDP > Personal Income.
When you have Medicare For All that eliminates point of purchase cost sharing (deductibles, copayments, coinsurance, etc.) while concurrently decoupling the cost of coverage to any individual from the funding via taxation (insureds are not responsible for funding the cost of their own coverage), demand (and costs) will explode unless some entity is empowered to ration care.
While I cannot speak to any hidden agendas within insurance organizations, I want to highlight a critical perspective missing from this article. The piece focuses heavily on the tug-of-war between insurers and providers and its impact on patients, but it overlooks the employer market, which funds the vast majority of private healthcare coverage in the U.S. This omission is significant.
In my view, employers will ultimately bear the full weight of the hidden costs emerging from how the NSA’s arbitration process is unfolding. We know that providers are currently winning approximately 80–85% of Independent Dispute Resolution (IDR) cases, and in many instances, arbitrators are awarding 100% of billed charges. These inflated determinations directly increase plan spend for both self-funded and fully insured employers. Over time, this will likely cascade into higher premiums, increased member cost-sharing, and mounting pressure on benefit affordability.
While fair reimbursement for providers is important, arbitration outcomes must also reflect market-aligned rates to prevent unsustainable cost escalation across the employer-sponsored system. Employers must be included in ongoing policy discussions. Otherwise, a law designed to protect patients from surprise bills could inadvertently drive-up overall healthcare costs undermining the very system it aims to safeguard.
"... Over time, this will likely cascade into higher premiums, increased member cost-sharing, and mounting pressure on benefit affordability. ..."
Agree. However, that wasn't a "bug" in the NSA. It was a feature. It is how Congress buys votes without having to increase taxes to pay the bill.
And, because today's premium/employee & employer contribution increases will occur after the fact, remote, from the actual legislation (passed late in 2020, effective in 2022), employers will be blamed for the ever increasing cost of coverage - whether it shows up as an increased deductible or copay or coinsurance or as an increase in employee contributions (or silently, quietly, in the form of diverting what would have been a wage increase).
Even where the employer decides, as they have many times in the past, to pick up any increase in costs, most every economist will confirm that employees still suffer. Medical coverage costs are part of Total Rewards, meaning that either wage increases or spend on other benefits must be diverted to fund the ever increasing cost of health coverage.
Keep in mind that a $100 deductible in 1970, indexed for per capita medical spend (a little less than 7.3% per year, from $353 (1970) to $14,570 (2023), National Health Expenditure Data), would be over $5,000 today. That is, most employer-sponsored plans have not indexed cost sharing (deductibles, copayments, coinsurance) to keep pace with the ever increasing medical spend.
Squeeze the balloon in one place, watch it pop out elsewhere.
Excellent point. The No Surprises Act (NSA) was meant to protect patients, but its ripple effect hits employer-sponsored health plans hardest. When insurers manipulate benchmarks or delay payments, costs rise, networks shrink, and employees lose access to affordable care. Employers ultimately bear the burden through higher renewals and reduced plan value.
It would be beneficial if healthcare advisors and consultants, those guiding employers through their healthcare strategy, had a voice in shaping NSA arbitration outcomes to ensure they reflect fair, market-aligned reimbursement across the system.
This is interesting. I just read a report the other day that providers were successful 80% of the time under No Surprises.
Patrick, referenced based pricing is part of the future. it works and saves a lot of money. Current provider network contracts just inflate the costs of care.
Another significant shortcoming of the No Surprises Act is that it does not cover Medicare Advantage Plans. If you are on an Advantage Plan, you are required to follow an arbitration process that is basically an arm of the insurer. I know this from personal experience.
MDs treat and heal people. MBAs extract as much profit from healthcare industry as possible while offering nothing in return. Which side will always ultimately win a battle over $ in this scenario? MBAs have nothing, like say, savings lives, to distract them from their sole focus. Get the foxes out of the henhouse. Of course MBAs believe fee for service structure means that doctors will over-treat patients. They cannot imagine a job that involves a mission more valuable than money. Get the corporate middlemen out of healthcare.
I've received late payments from insurance companies. It is usually a dollar or two. Literally, not figuratively. They will send me a check for 1.23$, or something of that nature, for claims that they admitted to delaying for over a year. Watch how the legislation is crafted and then implemented, keeping a close eye on who is receiving lobbying dollars. These companies will always find a way to cheat.
For the union, multiemployer plan I have managed for over 15 years - we started using reference based pricing for hospitals about 9 years ago - and we pay at least 140% of Medicare with that. But for nonhospital providers we use payments that always exceed Medicare by at least 10 to 25% and well over 95% of providers gladly accept that amount. We have had only one case go all the way to IDR and that was for an air ambulance claim.
But a handful of very high priced hospitals are constantly complaining that we should be paying closer to 300% of Medicare to "cover their costs and the shortfalls from Medicare and Medicaid. But we look at the cost reports they file and those cost reports seldom exceed 120% of Medicare. And we find many of the same hospitals are accepting our payments using the same methodology and only complaining about some claims while the payments we make on other claims are at least mildly contested.
We are not an insurance company, not a TPA, and do not use AI or other automated approaches - just a lot of direct human oversight. So we may be different than the UnitedHealthcares and BUCAs but we also find that some providers aggressively price.
As long as the arbitration system does not disclose the evidence used by both sides there will always be suspicion as to the validity of the arbitrator's decision(s).
“ But a handful of very high priced hospitals are constantly complaining”… so these are MBA v MBA battles? as in not MDs v MBA? that sounds right. all rent-seekers. need a federal ban on the corporate practice of medicine.
The issue is obvious.
Government intrusion by fixing prices for Medicare, Medicaid and VA beneficiaries, designed to buy votes, prompts providers to demand much more than 140% of Medicare allowable. Keep in mind that 140% of Medicare Allowable is likely 200+% of Medicaid Allowable in many states.
By the way, 140% of Medicare Allowable is a reasonable estimate of the actual cost of hospital services, plus a modest margin of "profit" for most "not-for-profit" hospitals.
If Americans whose coverage does not qualify for government price fixing want to see their cost of coverage and out of pocket spend reflect the actual cost of the services they receive, it is long past time for members of Congress to change their vote buying ways of price fixing. Most recent example? The so-called Inflation Reduction Act and Rx.
But, why aren't physicians and hospitals and the author of the initial post (above) targeting the source, the "root cause" of the gamesmanship in health care ... the governments who fix their reimbursements substantially below their actual cost to deliver services?
Employers will be off the hook of for- profit private insurance industries with passing Medicare For ALL Acts that were re-introduced (April 29th) by members of both the house and senate of the United States
No. Look to Vermont's single payer design - which estimated the cost would require substantial employer and worker income taxes (20+% in some cases). They looked at those funding levels and decided, upon further analysis and reflection, that even 20+% top marginal rates of income taxation would be insufficient to fund the new entitlement program.
That such high levels of income taxation would be insufficient shouldn't be a surprise since Health Care spend in America is 18+% of Gross Domestic Product (GDP) - where GDP > Personal Income.
When you have Medicare For All that eliminates point of purchase cost sharing (deductibles, copayments, coinsurance, etc.) while concurrently decoupling the cost of coverage to any individual from the funding via taxation (insureds are not responsible for funding the cost of their own coverage), demand (and costs) will explode unless some entity is empowered to ration care.
While I cannot speak to any hidden agendas within insurance organizations, I want to highlight a critical perspective missing from this article. The piece focuses heavily on the tug-of-war between insurers and providers and its impact on patients, but it overlooks the employer market, which funds the vast majority of private healthcare coverage in the U.S. This omission is significant.
In my view, employers will ultimately bear the full weight of the hidden costs emerging from how the NSA’s arbitration process is unfolding. We know that providers are currently winning approximately 80–85% of Independent Dispute Resolution (IDR) cases, and in many instances, arbitrators are awarding 100% of billed charges. These inflated determinations directly increase plan spend for both self-funded and fully insured employers. Over time, this will likely cascade into higher premiums, increased member cost-sharing, and mounting pressure on benefit affordability.
While fair reimbursement for providers is important, arbitration outcomes must also reflect market-aligned rates to prevent unsustainable cost escalation across the employer-sponsored system. Employers must be included in ongoing policy discussions. Otherwise, a law designed to protect patients from surprise bills could inadvertently drive-up overall healthcare costs undermining the very system it aims to safeguard.
"... Over time, this will likely cascade into higher premiums, increased member cost-sharing, and mounting pressure on benefit affordability. ..."
Agree. However, that wasn't a "bug" in the NSA. It was a feature. It is how Congress buys votes without having to increase taxes to pay the bill.
And, because today's premium/employee & employer contribution increases will occur after the fact, remote, from the actual legislation (passed late in 2020, effective in 2022), employers will be blamed for the ever increasing cost of coverage - whether it shows up as an increased deductible or copay or coinsurance or as an increase in employee contributions (or silently, quietly, in the form of diverting what would have been a wage increase).
Even where the employer decides, as they have many times in the past, to pick up any increase in costs, most every economist will confirm that employees still suffer. Medical coverage costs are part of Total Rewards, meaning that either wage increases or spend on other benefits must be diverted to fund the ever increasing cost of health coverage.
Keep in mind that a $100 deductible in 1970, indexed for per capita medical spend (a little less than 7.3% per year, from $353 (1970) to $14,570 (2023), National Health Expenditure Data), would be over $5,000 today. That is, most employer-sponsored plans have not indexed cost sharing (deductibles, copayments, coinsurance) to keep pace with the ever increasing medical spend.
Squeeze the balloon in one place, watch it pop out elsewhere.
Excellent point. The No Surprises Act (NSA) was meant to protect patients, but its ripple effect hits employer-sponsored health plans hardest. When insurers manipulate benchmarks or delay payments, costs rise, networks shrink, and employees lose access to affordable care. Employers ultimately bear the burden through higher renewals and reduced plan value.
It would be beneficial if healthcare advisors and consultants, those guiding employers through their healthcare strategy, had a voice in shaping NSA arbitration outcomes to ensure they reflect fair, market-aligned reimbursement across the system.
This is interesting. I just read a report the other day that providers were successful 80% of the time under No Surprises.
Patrick, referenced based pricing is part of the future. it works and saves a lot of money. Current provider network contracts just inflate the costs of care.