GAO examines No Surprises Act payment and network trends

Recent trends seen as a consequence of the No Surprises Act (NSA) include a moderate increase in the share of providers going in-network for some services, according to a report by the Government Accountability Office (GAO).

Such a development was a secondary goal of the 2020 year-end legislation and could belie concerns that the large share of NSA arbitration decisions in favor of providers would diminish the incentive to join insurance networks.

Another trend evident in the report was a continued increase in emergency medicine payments to hospitals, even as such payments markedly decreased for physicians. That dichotomy similarly was observed before the NSA took effect, according to the new report.

Caveats to the findings include the indeterminate impact of additional factors, the GAO said, citing the COVID-19 pandemic and the increase in healthcare market consolidation during the five-year study period.

In addition, the agency said the findings are not generalizable to the entire commercial health insurance market but instead apply only to the national and regional insurers that were included in the claims data set covering more than 110 million patients per year.

Modest increases in in-network participation

The GAO examined claims data for emergency medicine, anesthesiology, radiology and air ambulance services to gauge changes during a time frame spanning 2019 through 2023. The assessment spanned three years before NSA core provisions took effect and two years after they began Jan. 1, 2022.

Three of the four specialties showed increases in in-network claims, which the GAO used as an indicator of changes to network participation.

In 2021-23, the percentage of in-network claims for emergency medicine increased from 97.5% to 98.8% for facility claims and from 90.8% to 93.5% for professional claims.

“According to representatives from emergency provider associations, facilities are more likely to be in-network than emergency physicians due to their larger size and ability to negotiate more favorable rates and contract terms across a range of services provided in the facility,” the report states.

The share of in-network physician claims for anesthesiology increased from 96.1% in 2021 to 97.5% in 2023, per the report. The shift was less pronounced at hospitals than at ambulatory surgical centers.

Among radiology claims, the in-network share essentially stayed flat during the study period, regardless of setting. Insight in the report suggested there may have been little room to grow because network participation was strong before the NSA.

Air ambulance services made the biggest jump during the five-year study window. In-network claims as a share of total claims rose from 89.8% to 93.9% over the five-year period, likely stemming from newly negotiated contracts by two large insurers for 2022.

Payment trends before and after the NSA

Payment trends as assessed in the study largely continued preexisting patterns, rather than reflecting sharp changes attributable to the NSA.

That question has been a point of interest for stakeholders, especially with respect to the impact on payment negotiations of introducing qualifying payment amounts (QPAs, i.e., the insurer’s median in-network payment rate for a given service in the provider’s market) as part of the NSA.

Controlling for volume changes, the GAO found that payments for emergency services as billed by facilities increased by 12.2% between 2019 and 2023. In contrast, physician-billed emergency services declined by 20.1%.

“We found that payment trends for in-network emergency medicine services remained relatively unchanged before and after the No Surprises Act protections took effect in 2022,” the GAO wrote.

Nonetheless, the changes were notable when compared with a control group of services, i.e., family medicine, which has less exposure to NSA provisions. The decline in that specialty was 4.2%.

In radiology, payments in 2022 continued a decline that had been seen for several years, and an increase in 2023 was not enough to reach 2019 payment levels. The net decreases for the study period were 2.2% for facility-based services and 9.4% for physician claims in hospital outpatient departments.

Declines in anesthesiology payments were seen in hospitals and ambulatory surgical centers both before and during the NSA era, except for a small increase at ASCs in 2023.

Air ambulance service payments dropped in 2022 after a three-year run of increases, then rose again in 2023 but remained below 2019 levels.

Insurer and provider perspectives diverge

The GAO also conducted a qualitative analysis via interviews with representatives for providers (e.g., the American College of Emergency Physicians) and insurers in Arkansas, Maryland, South Dakota, Texas and Washington.

There was a notable difference in the outlook expressed by the two stakeholder categories, with providers largely describing flat or declining payments and some contract terminations.

“Representatives from all five provider associations for the selected specialties in our review told us that network participation for their specialties had likely remained the same or declined after the No Surprises Act protections went into effect,” per the report.

One association (not identified) said more than 80% of its members had at least one contract terminated after the NSA protections kicked in.

“Association representatives attributed any declines in network participation for their specialties to the No Surprises Act,” the report states, with the respondents citing the increased likelihood that insurers would terminate contracts or seek to negotiate lower rates.

Conversely, representatives of six insurers reported stability or increases in network participation.

Among state health departments in the five states, four said they had observed no decreases in network participation, and one said an increase was apparent.

“Officials from all selected departments said they were not concerned about adverse effects of the No Surprises Act on network participation within their states,” the GAO wrote.