House bill would eliminate NSA arbitration, align payments between payers and providers
A Democrat in the U.S. House of Representatives has introduced a bill to alter the No Surprises Act (NSA), removing the established arbitration process that serves as the only true way for providers and payers to resolve disputes over reimbursement rates for out-of-network care delivery.
Rep. Frank Pallone (D-NJ) introduced the “Lower Premiums, Faster Payments Act” last week, that if passed would totally eliminate the arbitration procedures starting in 2027, effectively eliminating a core piece of the NSA.
Per the terms of Pallone’s bill, negotiated rates for out-of-network care would be a thing of the past, with payers instead forced to pay flat rates, which would be aligned with normal in-network insurance rates that payers usually pay for beneficiaries.
Pallone, in defending the effort to effectively unite in-network and out-of-network rates for the purpose of disputes, said he was motivated by the failures in the Independent Dispute Resolution (IDR) process, which he said is “clearly not working”.
The nonprofit, nonpartisan consumer advocacy group has backed Pallone’s proposed act, writing in a statement, that the IDR arbitration process is effectively a “loophole” that takes the teeth out of the NSA.
“Even though the No Surprises Act is successfully preventing patients from getting unexpected out-of-network bills, consumers also need additional protection against inflated premiums. Private equity firms and corporate middlemen are abusing the law’s arbitration process to collect payments multiple times what is normally paid, extracting windfall profits that get passed on to all of us through higher premiums,” Families USA Executive Director Anthony Wright said.
“Congress needs to close the loopholes in the law that are leading to higher health premiums. We are thrilled Rep. Pallone is proposing this common-sense solution to end the industry abuse of arbitration by replacing it with a market-based benchmark. This bill would take away the incentive for corporate middlemen to flood the system with disputes and win inflated payouts,” he added.
NSA arbitration chaos
The move from Pallone comes after a September ruling from a federal court, where a judge declined to step in on an IDR dispute, where insurer Cigna was told by arbitrators that it owed $3 million in payments.
Although Cigna was given 30 days to comply, it resisted doing so, resulting in East Coast Advanced Plastic Surgery filing a lawsuit. While federal Judge Michael H. Park agreed that the IDR decision was complete, he declined to intervene, citing the court’s lack of authority to intervene in the NSA process.
“The text and structure of the NSA make clear that it does not provide a private right of action to enforce payment awards obtained through the NSA’s IDR process. Although the NSA gives providers a right to payment from health plans for certain services, it delegates enforcement authority to multiple federal agencies and to states,” he wrote in his ruling.
Pallone’s bill is newly introduced and has not been put up for a vote. Its potential to gain traction is unclear at this time.
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