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GAO Report: Biden Administration’s Bungled Implementation of ‘No Surprises Act’ Surprises Providers with a Bureaucratic Nightmare

December 22, 2023

WASHINGTON, D.C. – A new Government Accountability Office report looking into the independent dispute resolution (IDR) process validates bipartisan concern of Ways and Means Committee members about the Biden Administration’s poor implementation of the No Surprises Act. Details from the report reveal the majority of claims by medical providers are still unresolved, and those lucky enough to have their claim arbitrated are subject to a lopsided dispute resolution process that is far from what Congress wrote into law. Additionally, after courtroom losses and repeated pressure from the Ways and Means Committee, the Departments of Health and Human Services, Labor, and the Treasury this week announced a reduction in the administrative fee to enter the IDR process. In response to the GAO report, Ways and Means Committee Chairman Jason Smith (MO-08) released the following statement:

“The federal government’s bungled implementation of the No Surprises Act has meant new surprises for patients facing reduced access to care, longer wait times, and smaller insurance networks, while medical providers are waiting months to be reimbursed by insurance companies. GAO’s report is further evidence that the Biden Administration is failing to deliver this law’s promised benefits to patients and providers. While I’m pleased the bipartisan advocacy of members of the Ways and Means Committee has contributed to a reduction of the dispute resolution process administrative fee, there’s much more that needs to be fixed. We will continue our efforts to hold the Biden Administration accountable for ignoring the law’s clear Congressional intent.”

Highlights from the GAO Report

  • Most Cases Still Unresolved: Of the 488,922 disputes initiated from April 2022 through June 2023, 61 percent remain unresolved as of June 2023.
  • Insurance Companies Not Paying Providers: Completion of the IDR process took an average of 150 days, with the longest wait clocking in at 268 days. Furthermore, a majority of claims from providers remain unpaid after the required 30-day period.
  • Failing to Expand Insurance Networks: Providers reported that the implementation of the law has not led to an increase in in-network contracting, and now health insurers offer “take-it-or-leave-it” rates below market benchmarks.
  • Bureaucratic Red Tape: Medical providers and health insurers have expressed concern with the volume of ineligible claims and restrictive batching rules.
  • Outrageous Admin Fee Stopping Providers from Using the Process: Providers frequently chose not to file a dispute because the $350 administration fee was often higher than the claim amount.
  • Lack Of Transparency About Qualified Payment Amount (QPA): The QPA – used in part to determine arbitrated payments – has been wrongfully applied throughout the IDR process. To make matters worse, every medical provider interviewed by GAO said they were concerned with the lack of transparency around the QPA calculation, and despite promised audits of the QPA calculation methodology, nothing has been released as of July 2023.

Ways and Means Win: Reduction of the Dispute Resolution Process Fee Helps Medical Providers, More Improvements Still Needed
Following a courtroom loss and months of questions and oversight from the Ways and Means Committee, the Departments of Health and Human Services, Labor, and the Treasury slashed the administrative fee.

  • Administrative fee was cut from an illegally finalized $350 to $115 per claim, helping more providers access the IDR process.
  • The GAO report found that the original $350 administration fee prevented many providers from filing claims, especially if the claim amount was smaller than the fee.
  • While the reduced fee allows more providers to access the IDR process, the Ways and Means Committee urged the Departments to address the many other outstanding concerns with the Biden Administration’s flaw implementation of the law.

Oversight Timeline of the No Surprises Act

  • May 16, 2023: The Committee holds a bipartisan hearing on the importance of price transparency for patients to receive better care at a lower price.
  • September 19, 2023: The Committee holds a bipartisan hearing that revealed patients are losing access to care and their health insurance covers fewer doctors, while medical providers are struggling to get reimbursed for services because of the Biden Administration’s flawed implementation of the law.
  • October 18, 2023: The Committee hosts a bipartisan roundtable with the agencies administering the No Surprises Act to demand answers for how the process is harming both patients and providers.
  • November 9, 2023: Ways and Means Republicans send a letter to Health and Human Services Secretary Xavier Becerra, Treasury Secretary Janet Yellen, and Acting Labor Secretary Julie Su demanding the Biden Administration follow the law’s clear intent in implementing this historic patient protection legislation.

Read the GAO report here.