Six years ago, Congress passed a bipartisan law designed to prevent surprise medical bills for patients treated in the emergency room if a doctor didn’t accept their health insurance.
A New York Times investigation published on Monday delved into a “loophole” created under the “No Surprises Act,” a measure that President Donald Trump signed into law in December 2020. It established a new arbitration process between insurers and medical providers such as surgeons, doctors, nurses and their assistants.
The unexpected outcome is that the law has enabled surgical assistants, in certain instances, to outearn surgeons.
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The new loophole, explained
The outside arbitration mechanism was originally meant to shield patients from the onerous bureaucracy that long produced unexpected medical bills, which at one point affected one in five in-patient emergency room visits.
The so-called independent dispute resolution provision went into force in 2022. The arbiter determines what’s a fair price for the medical services delivered based on what doctors and hospitals typically charge for them on insurance plans.
Yet medical providers can argue to be compensated at much higher payment rates compared to what a usual health insurance plan pays out. It’s been a lopsided process with providers winning 85% of cases, per the NYT.
The Times noted that a surgical assistant in Dallas involved in a prostate removal operation received $50,456 from the arbitration process in March — 27 times more than the surgeon, who earned $1,843 after accepting the patient’s health insurance.
The Times listed other instances of sizable arbitration-related payouts. For carrying out a breast reconstruction surgery, a surgeon earned $2,707. Their assistant earned $111,000, or roughly 41 times more.
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Growing calls for reform
Some health experts warn that a lucrative arbitration process could encourage doctors, surgical assistants and other medical providers to opt for arbitration instead of accepting a smaller payout from a person’s health insurance. And trade groups are pushing for changes to prevent staggering payouts.
“Policy action is needed to address flawed incentives in the IDR process and protect consumers from unconscionable price gouging by out-of-network providers and IDR middlemen,” said Chris Bond, a spokesperson for AHIP, a trade association that represents the U.S. health insurance industry, in a statement.
Surgical assistant groups told the NYT that health insurers often exclude them from their networks, and they’ll receive meager payments that fluctuate in amount. Luis Aragon, chief executive of Illinois-based Surgikal Assistants, told the New York Times that he once received $30 after a three-hour robotic surgery. He also said that a constant stream of five or six-digit payouts is “not sustainable” for healthcare.
The Congressional Budget Office, a nonpartisan budget scorekeeper, initially projected a substantial reduction in overall health spending from the federal government in response to the law’s implementation. Earlier this month, the CBO said the law could increase health prices and monthly premiums for commercial health insurance since it hadn’t forecasted sizable payouts from the arbitration process.
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Joseph Zeballos-Roig is a policy and politics journalist based in Washington D.C with a focus on economics. He is experienced in connecting the significance of events in the capital to the lives of everyday Americans whether its taxes, tariffs, interest rates or federal programs.
