Recent ruling on No Surprises Act will likely lead to higher health care premiums, costs

Providers may promise to “do no harm,” but clearly the thing some of them care about keeping healthy, above their patients, is their revenue stream. After fighting against patients -- and losing -- in the halls of Congress and again during the executive branch’s rule-making process, they finally found a sympathetic ear in one federal district court.

Scales of Justice bronze statue

You don’t often see six different lawsuits filed in federal courts across the country on the same issue. But that’s the breadth of the legal challenges to the No Surprises Act. It’s a response by medical providers to how well the Act’s rules will keep health costs down by protecting patients from exorbitant out-of-network medical bills and by setting up an arbitration system between providers and insurers. 

The lawsuits were filed within weeks of the law taking effect on Jan. 1, a little more than a year after it passed the Democratic-majority Congress and then-President Donald Trump signed it into law. Even in bitterly divided Washington, we saw bipartisan agreement that this was a crucial protection for Americans’ health and finances. 

Congress expected this system would result in fair but lower-cost payments which could reduce our insurance premiums by as much as 1%, while still giving providers reasonable profit margins. Every person who has insurance or receives medical care is a winner. But that may not last if providers win their recently filed lawsuits. 

All six court filings question the provisions embedded in the Act’s arbitration system to keep costs down. The law and its implementing regulations established a way to rein in charges by requiring arbitrators to use the median charge in the geographical area for similar services as a baseline for decisions about disputed charges. 

One Long Island emergency room doctor complains the law is “depriving the physician of the right to collect from the patient the amount that the insurer is not required to pay.” His lawsuit is challenging the constitutionality of the law and its rules and asks to strike the entire law, including the patient protections. He wants the right to take patients and insurers to court before a jury to collect his fees. That’s a surefire way to drive up costs; he says about 78% of his practice’s 2,700 patients per year are out-of-network. If this surgeon wins his case, surprise out-of-network medical bills will become the norm again across the country, immediately.

Surprise medical bills have long caused financial stress. One in five Americans who visit an emergency room or have surgery receives at least one “balance bill” for a provider or service that isn’t not covered by their insurer’s network. A big part of the problem is how little control we patients wield during treatment. Providers who we have no power to choose — including emergency room doctors, anesthesiologists and radiologists – send an outsized portion of these surprise medical bills. 

That means patients get stuck paying hundreds to thousands of dollars, making up the balance between what that provider charges and what their insurance pays. This predatory billing practice has grown in frequency as private equity investment in health has increased. The desire to reap profits for investors makes surprise billing a lucrative business practice.

When we can’t dictate whether we use in-network providers or not, our insurers end up paying higher costs. In a domino effect, those added costs drive up prices for all insured Americans.

Unfortunately for patients and health care consumers, one lawsuit, Texas Medical Association v. The United States Department of Health and Human Services has been decided in favor of the plaintiffs. The judge ignored the weight of the evidence and destroyed the careful structuring of the arbitration system. Removing those guardrails is likely to result in disproportionate payments to out-of-network providers at the expense of all insured Americans. It’s far more likely we’ll all pay higher premiums. Will our extra dollars guarantee better medical care? Of course not. But arbiters won’t have constraints on the amounts they award providers and someone will have to pay. 

Providers may promise to “do no harm,” but clearly the thing some of them care about keeping healthy, above their patients, is their revenue stream. After fighting against patients — and losing — in the halls of Congress and again during the executive branch’s rule-making process, they finally found a sympathetic ear in one federal district court. We commend the Biden administration and Congress for standing firmly on the side of Americans to protect patients from high health care costs by implementing strong rules against surprise bills. 

This setback shouldn’t stop patients and consumers in their fight for lower health care costs. Right is on our side, as is popular opinion. One misguided court decision will not stop all the American patients who are happy to pay a reasonable price for their health, but are sick to their stomachs because of the profit-driven interests of private equity-owned providers. 

Photo Credit: Scales of Justice by Tingey Injury Law Firm on Unsplash  

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Patricia Kelmar

Senior Director, Health Care Campaigns, PIRG

Patricia directs the health care campaign work for U.S. PIRG and provides support to our state offices for state-based health initiatives. Her prior roles include senior director of health policy with the National Consumers League, senior policy advisor at NJ Health Care Quality Institute, and consumer advocate at NJPIRG. She serves on the board of the Patient and Caregiver Engagement Advisory Group for the National Quality Forum. Patricia enjoys walks along the Potomac and sharing her love of books with her friends and family around the world.

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