The Impact of Surprise Billing Laws on Emergency Services

Abstract

Numerous states implemented laws in the 2010s to protect emergency patients from surprise out-of-network (OON) medical bills, following the Affordable Care Act's (ACA) unsuccessful attempt to protect emergency patients. We investigated the effects of the ACA's greatest-of-three reimbursement rule and subsequent state laws on emergency physician reimbursements. We also estimated the effect of the state laws on charges, network participation, and potential surprise billing episodes. We found evidence that the ACA's greatest-of-three rule may have resulted in a reduction in OON emergency reimbursements. Apart from Connecticut, which experienced a doubling of OON prices relative to controls for patients in fully-insured health plans, we did not find consistent evidence of state law effects on prices or charges. However, many state laws resulted in increased network participation in fully-insured health plans (and self-funded plans in New Jersey). The laws were also associated with a reduction in potential surprise billing episodes for both fully-insured and self-funded health plans. Our results suggest that the federal No Surprises Act, which is similar to many of the state laws, is unlikely to lead to increases in prices, but may benefit patients through increased provider network participation and alignment.

Keywords: Surprise Medical Billing, No Surprises Act

JEL Classification: I18, L51