Insurers would face larger No Surprises Act penalties under new bill

Sens. Dr. Roger Marshall (R-Kan.) and Michael Bennet (D-Colo.) are expected to unveil legislation Monday that would set the stage for an effort to strengthen penalties against health insurance companies that violate the No Surprises Act.

The No Surprises Act, enacted in 2020, is meant to protect patients against unexpected out-of-network medical bills. But providers and patient advocates complain that health insurance companies have not been following the law's requirements to remunerate those providers.

Related: How surprise billing arbitration strains physician groups

The No Surprises Act Enforcement Act of 2024 would boost fines to $10,000 on insurers that don't comply with reimbursements decided under the law's arbitration system. The bill, provided in advance to Modern Healthcare, would triple late or unpaid payments.

The legislation also would apply penalties to insurers that owe emergency services providers, ambulances and air ambulances, which account for a large share of surprise bills.

The independent dispute resolution process has been beset by lawsuits, overwhelmed by volume and often leaves providers in limbo even after payment decisions are rendered.

"The idea that health insurers are breaking the law and unfairly punishing patients and providers is beyond the pale," Marshall, an obstetrician, said in a statement. "Our legislation ensures that out-of-network medical bills are resolved promptly and fairly, with enhanced penalties for any failure by the health insurers to do so." A threat of bigger fines could nudge insurers to fork over the money they owe providers, he said.

"We are fighting for patients, who often feel helpless battling the insurers and the healthcare industry," Marshall said. "Let's level the playing field and put patients' care and positive outcomes above unfair payment practices."

The No Surprises Act Enforcement Act likely missed its chance to advance this year as part of a year-end funding package Congress is expected to consider this week. But its introduction serves notice that it may be a priority when the 119th Congress convenes in January.

Marshall and Bennet are both members of the Health, Education, Labor and Pensions Committee, which has jurisdiction over the No Surprises Act.

The health insurance trade group AHIP did not respond to a request for comment.