On July 6, 2023, the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE) released the first of five required annual reports on the impact of the No Surprises Act (NSA) on health care markets (the Report). The Report highlights baseline trends in the health care industry and notes that the empirical data to analyze the effects of the NSA on the health care market is not yet available. Nonetheless, the Report found that the NSA has already decreased the prevalence of out-of-network claims since it took effect in January 2022. ASPE will continue to collect and analyze data for these statutorily mandated reports through 2027.
The NSA directs the ASPE, in consultation with the FTC and the Attorney General, to study the effects of certain provisions of the NSA on market consolidation, overall health care costs, and access to health care services. The NSA also tasks the ASPE, in consultation with the Secretary of Labor and the Secretary of the Treasury, to make recommendations regarding the consolidation of health care providers, plans and issuers. The Report highlights baseline trends and identifies the factors that ASPE intends to evaluate for future reports.
State Surprise Billing Trends
The Report looked to prior research studies analyzing the impact of various state surprise billing laws for a baseline understanding of the market effects of various approaches to surprise billing and dispute resolution. The Report indicated that these state laws had varying impacts on the healthcare market and reimbursement, but generally found that the changes to out-of-network reimbursement impacted both in-network and out-of-network reimbursement across the state health care market. One factor causing market shifts is the outcome of an arbitration or other dispute process, to the extent state law provides for one. Studies found that, to the extent state law provided a benchmark to guide the arbitrators, the arbitration results were largely tethered to the benchmark, and the market was shifted to follow. The NSA largely defers to state law when a state has law on the issue, so these state law effects are expected to continue.
Out of Network Trends
Looking generally at the out-of-network billing trends prior to implementation of the NSA, the ASPE reported that out-of-network billing was trending downward between 2012 and 2020. Specifically, the prevalence of out-of-network claims decreased from 6.0 percent to 4.7 percent in this time frame, and the percent of total payments that were out-of-network decreased from 9.2 percent to 6.8 percent between 2012 and 2020. ASPE also reports that, in this time period, the largest volume of out-of-network billing was highly concentrated among a small percentage of physicians within certain specialties.
The Report acknowledged that the amounts paid to out-of-network providers for claims under the NSA has the potential to impact the health care market beyond out-of-network reimbursement. ASPE forecasted potential effects on contracted rate negotiations, total health care spending, provider and plan consolidations, patient access to care, and quality of care. However, the Report found that these effects will likely result from the outcomes of the NSA
Independent Dispute Resolution (IDR) process, and that there is not enough data available to understand how these effects will play out, as the Report states that the IDR process is still in early stages of utilization.
Market Consolidation Trends
The Report also looked more generally at market trends. ASPE found that there were more than 1,000 announced hospital mergers and acquisitions between 2010 and 2020 but no increasing overall trend in hospital ownership consolidation since 2017. In contrast, the Report found a significant increasing trend in the number of physician group mergers and acquisitions since 2010, with a noted large increase in volume in 2021. The Report flagged the growing focus on the impact of mergers across the health care industry—of commercial insurers, provider groups, and hospitals—on health care prices, health care spending, quality of care, patient access and health care wages. For example, the Report indicated that the horizontal consolidation of insurers has been shown to result in lower prices paid to providers and higher premiums charged to consumers, with no data to indicate an increase in patient access to care. ASPE noted a continued focus on these factors, and that NSA’s impact on these market factors is not yet apparent but will be considered in the 2024 report.
The Report is available here.
