Before
the
No
Surprises
Act,
patients
often
got
stuck
in
the
middle
of
billing
disputes.
For
instance,
when
they
went
to
an
in-network
hospital
but
were
treated
by
an
out-of-network
provider
or
when
they
needed
emergency
care
but
couldn’t
choose
who
treated
them.
This
often
led
to
them
receiving
huge
surprise
bills.
The
No
Surprises
Act,
which
went
into
effect
in
2022,
changed
this.
But
new
issues
arose,
particularly
relating
to
the
Independent
Dispute
Resolution
process.
At
the
heart
of
this
is
a
recent
lawsuit
Anthem
filed
against
Prime
Healthcare.
The
No
Surprises
Act
protects
patients
from
unexpected
bills
and
removes
them
from
insurer-provider
payment
friction.
The
act
requires
insurers
and
providers
to
enter
into
30
days
of
open
negotiation
to
determine
how
much
providers
are
paid.
If
they
can’t
come
to
an
agreement,
either
side
can
use
the
Independent
Dispute
Resolution
(IDR)
process,
in
which
a
provider
submits
a
payment
offer
and
an
insurer
submits
a
payment
offer
and
then
a
neutral
arbitrator
picks
one.
This
Independent
Dispute
Resolution
process
was
intended
to
be
used
as
a
last
resort.
But
some
in
the
industry
now
argue
that
the
IDR
process
is
being
misused
by
providers
leading
to
an
explosion
of
cases
using
this
mechanism.
Anthem
Blue
Cross
Life
and
Health
Insurance
Company,
an
Elevance
affiliate,
filed
a
lawsuit
earlier
in
January
against
11
Prime
Healthcare
facilities
in
California.
Anthem
is
accusing
these
facilities
of
“knowingly
flooding”
the
IDR
process
with
more
than
6,000
ineligible
disputes
and
“extracting
millions
of
dollars
in
wrongfully
obtained
awards.”
Aside
from
this
lawsuit,
Elevance
has
cases
against
other
companies
in
other
states
including
in
Georgia
and
Ohio.
“When
this
bill
was
passed,
the
federal
government
expected
17,000
of
these
cases
to
come
through
in
any
particular
year,”
said
Dr.
Catherine
Gaffigan,
president
of
Elevance’s
health
solutions
business,
in
an
interview.
“Instead,
what
we
have
seen
is
millions
of
cases
actually
going
through.
And
Elevance
actually
sees
17,000
of
these
a
month.
So
clearly
this
has
been
exploited
in
ways
that
were
never
intended.”
Elevance
isn’t
the
only
insurer
up
in
arms
about
alleged
IDR
misuse.
UnitedHealthcare
sued
Radiology
Partners
in
August
and
BCBS
Texas
went
after
Zotec
Partners
in
December.
One
industry
expert
equated
the
issue
to
the
340B
Drug
Pricing
Program,
which
allows
hospitals
and
clinics
that
treat
a
large
population
of
low-income
and
uninsured
patients
to
buy
outpatient
prescription
drugs
at
a
discount.
It
was
intended
to
support
safety-net
providers,
but
has
since
grown
exponentially.
Between
2000
and
2020,
the
number
of
covered
entity
sites
participating
in
the
program
grew
from
8,100
to
50,000.
The
IDR
process
“was
invented
for
good
reasons.
…
That’s
similar
to
the
good
intentions
behind
340B.
But
I
think
there’s
a
chance
that
in
this
situation,
the
IDR
process,
like
the
340B
process,
is
being
repurposed
to
serve
as
a
revenue
stream
for
hospitals
that
find
justification
for
doing
so,”
said
Michael
Abrams,
managing
partner
of
Numerof
&
Associates.
Elevance
is
calling
for
lawmakers
to
reform
the
IDR
process
to
ensure
that
it
is
used
in
the
way
they
intended.
Anthem
v.
Prime
Healthcare
In
the
complaint,
Anthem
claimed
that
the
defendants
used
the
IDR
process
as
an
“an
extractive
tool
to
gouge
the
healthcare
system,”
versus
a
forum
for
resolving
good
faith
payment
disputes.
Anthem
declared
that
Prime
Healthcare
began
flooding
the
IDR
process
in
January
2024.
The
facilities
received
roughly
$15
million
greater
than
what
Anthem
had
originally
paid
for
services,
and
the
typical
reward
was
more
than
six
times
greater
than
what
a
contracted
provider
would
be
paid
for
the
same
service.
Anthem
added
that
this
fits
Prime’s
reputation.
“Defendants,
and
Prime
generally,
have
developed
a
reputation
for
prioritizing
profits
over
patients,”
the
complaint
stated.
“Many
hospitals
acquired
by
Prime
have
canceled
longstanding
network
contracts
to
extract
higher
reimbursement
for
the
same
services.
Historically,
out-of-network
Prime
hospitals
aggressively
pursued
collection
from
their
patients
and
routinely
filed
litigation
against
health
plans
like
Anthem
to
recover
ever-greater
payments.
And
Prime
hospitals
who
do
contract
with
health
plans
will
publicly
threaten
to
cancel
those
contracts
if
they
do
not
receive
higher
reimbursement
rates,
putting
patients
in
limbo.”
Although
the
No
Surprises
Act
protects
patients,
Anthem
is
alleging
Prime
exploited
the
IDR
process
by
routinely
pushing
emergency
claims
—
eligible
or
not
—
into
arbitration
to
maximize
payments.
The
defendants
even
initiate
IDR
against
Anthem
for
patients
who
aren’t
Anthem
members,
the
insurer
alleges.
Anthem
added
that
Prime
knowingly
files
hundreds
of
IDR
disputes
each
month.
“When
these
disputes
proceed
to
an
IDR
payment
determination—and
they
often
do—Defendants
perfunctorily
demand
80%
of
their
original
billed
charges,
ignoring
any
individual
circumstances
of
the
episode
of
care
or
market
realities
regarding
its
value,”
the
complaint
stated.
Anthem
also
alleges
that
Prime
repeatedly
falsified
information
throughout
the
IDR
process
to
bypass
eligibility
rules
and
push
ineligible
disputes
to
payment
determinations.
Making
issues
worse,
Prime
only
sends
IDR-related
communications
to
Anthem
through
an
“unnecessarily
restrictive
and
cumbersome
online
portal,”
which
makes
it
“impossible”
for
Anthem
to
respond.
Prime
Healthcare
called
Anthem’s
lawsuit
“meritless.”
The
organization
stated
that
its
facilities
acted
in
compliance
with
the
No
Surprises
Act
and
the
IDR
process
and
did
not
balance
bill
any
patients.
“Anthem’s
lawsuit
ignores
the
reality
that
certain
large
health
plans,
including
Anthem,
amass
record
profits
by
underpaying
providers,
delaying
or
denying
care,
and
burdening
patients
with
administrative
barriers,
practices
that
have
eroded
the
public
trust,”
a
spokesperson
told
MedCity
News.
Beyond
its
initial
intent
According
to
one
healthcare
expert,
what
was
supposed
to
be
a
“narrow,
last-resort
pressure
valve”
has
instead
become
a
“fire
hose.”
And
providers
are
winning
the
majority
of
the
payment
determinations
(about
85%
in
2024),
with
median
determinations
in
late
2024
reported
to
be
around
459%
of
the
qualifying
payment
amount.
“Very
few
people
anticipated
just
how
far
the
No
Surprises
Act
would
drift
from
its
original
intent.
While
the
law
has
protected
patients
from
‘being
in
the
middle’
of
negotiations
between
providers
and
payers,
Congress
did
not
envision
the
volume
of
arbitrations
and
a
system
where
provider
groups
would
prevail
in
arbitration
more
than
80%
of
the
time.
What
was
designed
as
a
narrow
patient-protection
backstop
has
instead
become
a
parallel
payment
system
—
one
with
enormous
financial
consequences,”
said
Dr.
Adam
Brown,
an
emergency
physician
and
founder
of
healthcare
advisory
firm
ABIG
Health.
He
added
that
what
was
intended
to
protect
patients
has
just
morphed
into
a
“high-stakes
battlefield
between
providers
and
payers.”
Why
are
providers
winning
more
often?
According
to
Brown,
the
simple
answer
is
that
they
are
making
a
better
case
in
front
of
the
arbitrator.
However,
when
you
look
at
who
is
winning
the
cases,
they’re
often
private
equity-backed
who
have
“spent
time
and
capital
to
increase
the
volume
of
IDR
and
built
administrative
and
automated
processes
around
the
IDR
submissions,”
he
said.
Abrams
of
Numerof
&
Associates
echoed
these
comments.
“I
think
one
of
the
consequences
of
these
cases
may
be
to
accelerate
reexamination
of
the
IDR
process,
raise
questions
about
whether
it’s
really
functioning
the
way
it
was
meant
to,”
he
said.
Gaffigan
said
Elevance
is
in
conversation
with
lawmakers
and
the
Centers
for
Medicare
and
Medicaid
Services
about
changing
the
IDR
process,
including
requiring
arbiters
to
justify
unusually
high
rewards
and
providing
clarity
on
what
elective
services
are
eligible
for
IDR.
In
the
meantime,
Anthem
has
taken
its
own
steps
to
fix
the
issue.
For
example,
in
the
Fall,
it
announced
plans
to
deduct
10%
of
payments
to
hospitals
every
time
a
doctor
not
in
their
network
treats
a
patient
enrolled
in
one
of
their
plans.
Many
provider
organizations
have
pushed
back
against
this
new
policy,
including
the
American
Hospital
Association,
arguing
that
it
would
limit
patients’
choice
of
provider.
“The
core
objectives
of
the
NSA
were
to
protect
patients
and
to
incentivize
network
participation,”
the
AHA
said
in
a
statement
in
December.
“Anthem
undermines
this
landmark
legislation
by
introducing
new
patient
harms
and
targeting
the
very
hospitals
that
have
worked
in
good
faith
to
participate
in
the
plan’s
network.
The
AHA
calls
on
Elevance
Health
to
do
right
by
its
Anthem
enrollees
and
ensure
it
is
a
credible
partner
to
its
network
hospitals
and
health
systems
and
rescind
this
deeply
flawed
policy.”
When
asked
about
the
pushback
this
policy
has
received,
Gaffigan
noted
that
it
is
only
for
elective
surgeries
and
when
there
are
appropriate
in-network
providers
available.
In
addition,
critical
access,
rural
and
safety
net
hospitals
are
exempt.
“It
really
is
like
in
these
situations
where
there
are
lots
of
options,
and
yet
somehow
this
patient
is
ending
up
with
an
out-of-network
provider
in
an
in-network
hospital,
and
that
out-of-network
provider
is
then
taking
advantage
of
the
IDR,”
Gaffigan
said.
“We
would
prefer
to
never
actually
apply
this
penalty.
We
really
just
want
our
hospitals,
which
are
in-network
and
important
partners
for
us,
to
be
part
of
the
solution
here.”
She
added
that
while
the
No
Surprises
Act
protects
patients
from
surprise
billing,
they’re
ultimately
harmed
on
the
back-end.
“The
way
that
the
independent
dispute
resolution
process
is
being
abused
is
driving
up
cost,
and
that
ends
up
in
patients’
premiums,”
she
argued.
“It
ends
up
in
employers’
costs,
and
it
drives
up
the
cost
of
health
insurance,
and
unfortunately,
it’s
doing
that
and
not
driving
any
improvements
in
quality,
differences
in
care,
etc.
It’s
purely
inflationary.”
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