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T.The No Surprises Act has been hailed as a major bipartisan reform aimed at eliminating most of the surprise bills outside the network.

For years, Americans hoped insurance would protect them from high medical bills and keep their out-of-pocket costs at a modest level. Many people have received unexpected bills for medical services at unregulated prices, sometimes without secure options within the network.

The No Surprise Act tried to solve that problem. However, neither the law nor the recently issued final rule addresses the inherent deficiencies of private insurance that cause unexpected claims: high out-of-pocket costs and limited caregiver choice. The act is a band-aid that is too small to cover a large wound.

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Struggles over sudden billing are compounded by the fact that these two deficiencies, combined with the lack of a lasting political arrangement between payers and caregivers, make the complex solution itself difficult and cumbersome to effectively implement. It reveals how it creates financial problems.

Surprise claims are the predictable product of two major tools American insurance companies use to keep costs down. This is aimed at reducing the use of services by patients, especially from out-of-network high-paying caregivers. These tools cannot keep US healthcare costs down.

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Narrow healthcare worker networks and high out-of-pocket costs are uncommon in other high-income democracies. Instead, payers devise effective cost controls, such as negotiated capped rates for self-employed doctors, salaries for hospital doctors, hospital budgets, and annual spending caps.

A narrower network means more people get out-of-network bills that insurance companies don’t pay. A NORC survey found that nearly 60% of Americans said he had received a surprise medical bill by 2018. Media articles have exposed this dark side of America’s health care system and sparked calls for reform. By 2020, 33 states have regulated surprise bills. But federal law eliminated state regulation of employer self-funded health insurance plans regulated by the Employee Retirement Income Security Act and Air Ambulance, prompting Congress to act.

The No Surprises Act requires insurers to cover non-network services in some critical situations.

• For care in emergency departments and urgent care centers and transport by air ambulance
• For out-of-network doctors working in in-network hospitals
• For care inadvertently obtained outside the network due to an inaccurate network directory

Yielding to the demands of some hospitals and doctors, the No Surprises Act does not set prices. Instead, the insurance company and caregiver must negotiate a price within her 30 days or accept binding arbitration. In arbitration, insurance companies and non-network caregivers propose prices, the arbitrator chooses the more reasonable offer, and the losing party pays the arbitration costs. The new federal rule requires that the median payment rate in the network and the offer that best represents the value of the care received after considering six factors related to the patient, the care received, and the caregiver. instructing the arbitrator.

As such, the No Surprises Act incorporates key toxic ingredients in the US healthcare recipe: complexity, costly administration, and ongoing financial warfare. The law authorizes him $500 million to fund the arbitration and regulatory system. The Department of Health and Human Services estimates that he will invest $5 billion for insurance companies to implement the legislation, after which operating costs will average $1 billion annually.

Congress rejected two simpler alternatives. Requiring all doctors to be on the same insurance network as hospitals, or requiring insurance companies to fund emergency care by paying hospitals for all services, and covering doctors’ services is to leave it to the hospital. Doctor lobbying blocked both proposals. Congress also refused to pay for Medicaid, Medicare, or non-network care at average prices set by the largest private insurers.

Congress didn’t put a cap on how much you can claim for health care at, say, Medicare or Medicaid prices, so caregivers can impose top rates on the 30 million uninsured Americans.

U.S. insurers and employers fantasize that restricted networks and high out-of-pocket costs are holding back total spending by reducing the amount of treatment and the price paid. they don’t. The United States has 20% fewer hospital admissions and 40% fewer doctor visits than the average high-income democracy. .

Sudden bills are an endemic symptom of private health insurance. The No Surprises Act demonstrates the government’s preference for short-term, narrow thinking about large, persistent, and complex health care problems. While it may help those abused by sudden bills, the practice ignores those chronically harmed by other out-of-pocket costs, narrow networks, and high premiums. increase.

The No Surprises Act did not aim to improve insurance design, control costs, or encourage peace agreements between insurers and caregivers. increase. Caregivers can still extract high payouts and insurers can employ ineffective cost controls, yet unfortunately for Americans who need care, the expected This creates a high out-of-pocket expense. Lawyers will be busy as usual.

By cutting the gangrene surprise bill, the No Surprises Act will help keep business as usual for now.

Mark Lodwin is Professor of Health Law and Policy at Suffolk University Law School in Boston. Alan Sager is Professor of Health Policy and Management at Boston University School of Public Health.