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Healthcare costs are a top concern for families and employers. Across the country, prices for hospital care, physician services, prescription drugs and specialty treatments are rising faster than wages and inflation, putting pressure on household budgets, employers and the healthcare system as a whole.
Health plans have a responsibility not only to explain factors increasing costs, but to also play an active role in stabilizing them—by negotiating fair rates, ensuring patients have adequate access to high quality clinicians delivering better outcomes, coordinating complex care, and helping people better understand their coverage benefits.
The No Surprises Act (NSA) was created to protect patients from unexpected medical bills, especially in non-emergency situations. In many cases, the law has worked as intended. However, the law’s Independent Dispute Resolution (IDR) process — a government-run arbitration system used when insurers and out-of-network providers can’t agree on a price — is increasingly being applied beyond the law’s original intent. This misuse is driving up costs for employers and working families.
The Problem: The IDR system is being abused for financial gain.
Federal agencies initially projected about 17,000 cases per year, but volumes have grown more than 100 times that level. This surge is largely driven by out-of-network providers receiving awards many times higher than in-network rates, creating incentives to go out of network and push even more disputes into arbitration. Because arbitrators are paid per case, the system further rewards volume. A law to protect patients from surprise bills is now an exploited loophole that has become a jackpot for a small number of private-equity backed groups, out-of-network providers, and billing companies who realized they could turn it into a payment escalator.
The bills don’t fall on insurance companies, as the public often thinks. 90% of IDR costs fall on employer-funded plans, so it’s American families that get stuck with the tab.
While many IDR cases involve emergency services from a volume perspective, the financial impact is overwhelmingly driven by non-emergency, scheduled elective procedures, that lead to surprise billing. The highest-cost disputes largely involve services such as plastic and reconstructive surgery, spine surgery, and neuromonitoring, performed by out-of-network specialists at in-network hospitals and ambulatory surgery centers (ASCs) where in-network providers are available. In IDR, these out-of-network specialists frequently seek — and receive — payments far above in-network rates, with the average awards around nine times higher.
Recent reporting shows how this dynamic plays out in practice. In Idaho, state regulators have been asked to investigate Nutex Health, a Texas-based company that operates micro-hospitals and emergency facilities. According to the article, Nutex facilities have submitted out-of-network claims that are sometimes as much as 10 times higher than Medicare rates, generating an unusually high volume of dispute requests. Nutex Health also operates in Indiana.
A sensible approach: Elevance Health, through its Anthem Blue Cross and Blue Shield health plan, is implementing a policy that supports the terms of our in-network facility agreements. When members receive care at an in-network facility, the policy encourages the use of in-network clinicians whenever possible. This helps care teams work together and avoids higher costs from out-of-network clinicians. The policy does not apply to rural, critical access, or safety-net hospitals. It also does not apply to emergency care, situations where no in-network specialist is available nearby, or cases where out-of-network care has been approved in advance.
Why now? The volume of IDR claims is driving costs for employers and working families. In fact, nearly 90% of the associated cost burden falls on employer-funded health plans with multiple employers, utilizing our affiliated health plans, seeing around $20 million a year in unplanned expenses. This means employees pay higher premiums for their health care.
Addressing these rising costs also requires stronger oversight of the IDR process itself. Evidence suggests that a small number of arbitrators are repeatedly issuing awards far above in-network rates, even in cases involving scheduled, non-emergency care where in-network clinicians were available. When IDR outcomes consistently diverge from the law’s intent, they undermine affordability and encourage more out-of-network billing.
A call for collaboration: Anthem Blue Cross and Blue Shield is committed to working with Indiana clinicians, facilities and policymakers to protect patients, reduce unnecessary costs, and preserve access to care. By strengthening oversight and scrutiny of the IDR process and encouraging in-network care when appropriate, we can improve affordability, access, and the patient experience – shared goals across the healthcare ecosystem. The Indiana General Assembly is considering legislation, Senate Bill 189, that would prohibit Anthem Blue Cross and Blue Shield health plan from enforcing this policy, leaving consumers to pay the price. Call your state legislators and urge them to vote against Senate Bill 189. Until these abuses of the IDR process are addressed at the federal level, Anthem Blue Cross and Blue Shield will continue to leverage available solutions included in our in-network facility contracts to discourage this abuse that leads to higher premiums for Hoosiers and all of our covered members.
To learn more, visit anthem.com/update/idr.