HHS’s First Annual Report Evaluating the Impact of the No Surprises Act

The Departments of Health and Human Services (HHS) issued the first annual report on the impact of the No Surprises Act (NSA). The report “focuses largely on establishing a baseline and a framework for further evaluation” and “details key trends in factors that will be important to evaluate NSA effects including: the implementation and impacts of state surprise billing laws already in effect; trends in market consolidation and concentration; the impact of market consolidation and concentration on prices, quality, and spending; and trends in OON billing.” The trends are derived from numerous other studies cited within the report. There is very little original information and few meaningful conclusions drawn by HHS.

Here are the key takeaways:

Implementation and Impact of State Surprise Billing Laws

  • The varying state methods for addressing surprise bills complicate the evaluation of the NSAs impacts. The states vary in both their procedural approach and their benchmark rates. “For example, California sets payment benchmark rates for nonemergency services at greater of 125 percent of Medicare rates or the average in-network rate for a given plan and region, while New York has established an IDR process where the arbitrator is required to consider the 80th percentile of charges in a given region as a bench mark.” Keep in mind that the states do not regulate ERISA plans.
  • The impact of state surprise billing laws on in-network and ONN prices is not clear. “Numerous gaps remain in understanding of the effects of state surprise billing laws.”
    • According to HHS, “[t]he evidence of the effects of state surprise billing laws on both in-network and OON prices appears mixed.” It cites studies that show a decrease in OON price for anesthesiologists in California, but higher OON prices for emergency care in Connecticut.
    • There is an indirect impact on in-network prices and the current studies suggest that the price of in-network care is decreasing.

Consolidation and Competition

  • The most prominent vertical consolidation “has been hospitals purchasing or contract with physicians’ practices.” Nearly 50% of physicians were employed by hospitals as of 2021. Insurers and private equity companies are also acquiring physician practices.
  • For the past 30 years, hospital markets have become increasingly concentrated. The unconcentrated hospital markets have decreased from 23% in 2008 to 12% in 2020.

Trends in OON Billing

  • The overall prevalence of OON professional claims decreased from 6% to 4.7% from 2012 to 2020. The share of OON payments also declined from 9.2% in 2012 to 6.8% in 2020.
  • There is a substantial variation in OON claims in each state. For example, Alaska had the highest incidence of OON claims at 20.2% and Nebraska had the lowest at 1.8% in 2019.
  • Point of service insurance had the highest share of OON claims, next was health maintenance organizations, and the least was preferred provider organizations.
  • OON claims were most common among people aged 18-24 and least common among people aged 55-64.
  • OON claims were higher for men than women.


HHS evaluated numerous studies and a significant amount of data and seems to conclude that estimating the independent effects of the NSA will be very difficult due to the numerous variables and volume of data.