How the No Surprises Act solved balance billing but created a pricing problem | Loren Adler (Brookings Institution)

Loren Adler, Fellow and Associate Director at the Brookings Institution, joins to assess the No Surprises Act four years in after recent coverage in NYT sparked discussion.

The good news: patients have largely been removed from balance billing. The harder news: the IDR arbitration process that replaced rate-setting has pushed prices to nearly 4x historical in-network rates in radiology, with those costs flowing to employers and likely eventually back to patients through higher premiums. Arbitration was always risky — it's opaque, and human arbitrators tend to be more sympathetic to physicians than insurers.

Loren walks through what may have been a cleaner approach: a benchmark price tying out-of-network payments to a percentage of Medicare, or regulating contract design directly by making it illegal for anesthesia and surgical groups to hold discordant network status from the hospitals they work in. Both solutions had appeal but neither got far in Congress.

On the near-term outlook, Loren is candid: no big picture changes are likely because the winners are concentrated — a handful of PE-backed emergency medicine and anesthesia groups dominating the IDR process — and the losers are diffuse. This dynamic makes congressional action very unlikely in the near term.

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Referenced:

No Surprises Act: https://www.brookings.edu/articles/no-surprises-act-arbitration-databook/

Loren Adler, Brookings: https://www.brookings.edu/people/loren-adler/

Loren Adler on X: https://x.com/LorenAdler