Provider Charges and State Surprise Billing Laws: Evidence from New York and California
Surprise billing laws that allow dispute arbitration to use provider charges to determine out-of-network (OON) payments to providers may incentivize OON providers to increase their charges. This study published in Health Affairs examined changes in OON charges after enactment of surprise billing laws in New York and California.
OON provider charges increased in New York, where arbitration is tied to charges, whereas charges decreased in California where the law determines OON payments based on an algorithm tied to in-network rates.
Although the federal No Surprises Act forbids arbitrators from considering charges during payment disputes over surprise bills covered by the act, states with existing laws can continue to use those laws, which may allow the consideration of charges. This study demonstrates that surprise billing laws that allow for charges to be considered by arbitrators (such as New York) are associated with increases in OON provider charges, which may ultimately lead to higher costs for OON care.
Related Public Policy Research
The No Surprises Act: Dismissal Rates for Out-of-Scope and Ineligible Disputes
A majority of disputes submitted under the No Surprises Act are outside the scope of the law or procedurally ineligible for independent dispute resolution (IDR). By law, these disputes should be dismissed, but 64% of them still result in payment determination.
The No Surprises Act: Independent Dispute Resolution for Planned Procedures
This study found that provider payments from the No Surprises Act’s Independent Dispute Resolution (IDR) process for certain planned out-of-network procedures far exceeded in-network commercial and Medicare benchmarks. Policy changes are needed to align IDR outcomes with the law’s original intent and prevent excess costs.
Arbitration Outcomes for Out-of-Network Medical Bills Under the No Surprises Act
This study, published in INQUIRY: The Journal of Health Care Organization, Provision, and Financing, compared final payments for out-of-network care from disputes that underwent arbitration under the No Surprises Act in 2023 to commercial in-network rates and Medicare rates.