No Surprises Act implementation coincided with in-network claims growth

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When the No Surprises Act was fully implemented in January 2022, it coincided with a noticeable rise in the number of in-network claims, with a sharp rise found between 2019 and 2023, when in-network services as a percentage of claims lines grew from 84.1% to 90%.

That's according to a new FAIR Health analysis, which found that the increase varied from 4.8% in the Northeast to 8.3% in the Midwest and South.

WHAT'S THE IMPACT?

From the fourth quarter of 2021 to the first quarter of 2022, there was a relatively sharp 2.3% increase in in-network percentages nationally – and in all regions across all specialties at the time the NSA went into effect. 

When the focus is narrowed from all specialties to specialties of interest, an increase in in-network care from 2019 to 2023 is still apparent, but the growth was smaller. The increase in in-network care for specialties of interest from the first quarter of 2019 to the third quarter of 2023 was 4.7%, vs. 7% for all specialties.

From Q1 2019 to Q3 2023, radiology had the highest in-network percentage (ranging from 89.3% to 92% over the course of that period) compared to the other specialties of interest. Emergency medicine had the lowest in-network percentage, ranging from 71.6% to 83.1%.

During that same period, the in-network percentage of emergency medicine had a greater increase (13.2%) than the other specialties of interest. Pathology had the smallest increase at 0.6%.

In the South in 2023, there was a decrease in in-network care for three of the four specialties of interest: anesthesiology, pathology and radiology.

On average, allowed amounts as a percentage of billed amounts for both in- and out-of-network services decreased during the study period. The gap between allowed and billed amounts widened. From the first quarter of 2019 to the third quarter of 2023, allowed amounts as a percentage of billed amounts for in-network services fell by 14.3%; on average, allowed amounts were 46.2% of the billed amounts at the beginning of the period, and 39.6% of the billed amounts at the end. For out-of-network services, the decrease was 9.6%, and the drop was from 39% to 35.3% of the billed amounts.

A trend toward the convergence of average in-network and out-of-network allowed amounts was seen with the emergency medicine and radiology procedure codes sampled in the report, and was also seen in FAIR Health analyses of the top 10 codes by volume in the specialties of emergency medicine, pathology and radiology.

THE LARGER TREND

The No Surprises Act was signed into law on December 27, 2020. Most of the law's provisions took effect at the beginning of 2022, and applied to those enrolled in commercial health insurance coverage or group health plans renewing on or after January 1, 2022. Under the law, when anyone covered by private health insurance is treated for emergency services or at an in-network facility by an out-of-network provider, the healthcare provider or facility, such as a hospital, is prohibited from billing a patient above their in-network cost-sharing amount.

In December 2021, the American Hospital Association, American Medical Association and others sued the Department of Health and Human Services and the other federal agencies over implementation of the NSA.

The groups were not against the legislation, they said in the lawsuit, but took issue with how HHS implemented the IDR process to resolve payment rates between provider and payer. The interim final rule stipulated that the arbitrator must select the offer closest to the Qualifying Payment Amount, which is set by the insurer.

Later that year, the U.S. departments of Labor, Health and Human Services and Treasury issued final rules to clarify the arbitration process.

A February survey showed that during the first nine months of 2023, the No Surprises Act protected Americans from more than 10 million surprise medical bills.

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.