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From the article:
Dr. Rowe has taken full advantage of a new arbitration system, part of a major consumer protection law Congress passed in 2020 with bipartisan majorities. The No Surprises Act was designed to eliminate surprise medical bills, for patients who showed up in the emergency room and were treated by a doctor who didn’t take their insurance.
It bars those out-of-network doctors from billing patients directly. Instead, they can plead their case to a government-approved arbitrator. If they win, the patient’s insurer has to pay their desired amount.
By all accounts, the law is successfully protecting patients against bills from doctors they never chose. But it has also generated an expensive unanticipated consequence: Doctors have flooded the arbitration system with millions of claims. Most are winning, often collecting fees hundreds of times higher than what they could negotiate with insurers directly or what they could have earned from patients before the law passed.
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Some health plans said they have increased premiums this year to cover the extra costs. The United Service Workers health plan, which covers 20,000 trades workers in the New York area, said it boosted premiums by an extra 1.75 percentage points to offset arbitration awards and fees. The system has also enriched a new class of specialized businesses, which assist doctors in navigating the bureaucratic process.
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When the law passed, government officials estimated that about 17,000 cases would go to arbitration a year. Instead, doctors brought 1.2 million such cases in the first half of last year, and won around 88 percent of them.
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The arbitrators are doing well too. The fees they earn for deciding cases, which range from $425 to $1,150 per case, have added up. They earned $885 million from 2022 to 2024.
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In arbitration, doctors and insurers each propose a price for the care, along with arguments for why it is appropriate. An arbitrator must pick one of the two numbers, and there is no opportunity to appeal the decision.
Arbitrators have repeatedly approved doctors’ submissions of extremely high prices for common medical procedures, according to court filings and a New York Times analysis of a large public data set with basic information on each dispute.
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Many claims that shouldn’t be eligible for arbitration, such as those for patients covered through the government programs Medicare and Medicaid, move through the system anyway. The claim from the New Jersey anesthesiologist involved a patient on a UnitedHealthcare Medicare Advantage plan, according to a lawsuit that UnitedHealth has filed protesting the arbitration decision.
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Medical specialties like spinal and plastic surgery, for which surprise bills were rare before the law, now frequently have cases in arbitration, according to the public data. Some practices are using the law to obtain high payments for routine medical care, including gynecologists who have won fees 600 times higher than usual rates for placing intrauterine contraceptive devices, or I.U.D.s.
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Health policy experts have been surprised to see such lopsided results that favor doctors. Some argue that because the arbitrators are paid per case, they may have an incentive to render decisions that keep doctors coming back.
Arbitrators may also, like the broader public, prefer doctors to insurers, said Matthew Fiedler, a senior fellow at the Brookings Institution who has studied the law. “Arbitrators are people, and the typical person likes physicians.”
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