For those who celebrate, you will recall CMS issued its first audit of health insurer compliance with the No Surprises Act back in the summer of 2024. This audit was of CVS-owned Aetna Health in Texas. It found that Aetna was using the wrong methodology to calculate QPA metrics, not sending required disclosures to providers, and failing in basically every other area CMS looked into.
Now, after waiting years, we have two new audits of health insurers’ No Surprises Act compliance. To little surprise, health plans are now 0-3 regarding their compliance with the law. What’s also important to note here is that federal agencies are statutorily required to produce dozens of these audits each year. In fact, the Department of Labor is tasked with 25 per year, and HHS up to nine.
To say that it’s a joke that only three audits have been completed after 4.5 years of the law being in effect is an insult to comedy. Federal agencies should be ashamed. We’ll also explain at the end why this fact is important in light of a new legislative proposal in Congress.
The first of these two new audits is of the School Employees Retirement System in Ohio. This plan is a self-funded, non-federal government plan that, wait for it, uses Aetna as its third-party administrator (TPA). (Note: see here for a policy paper we recently co-authored with EARA on how TPAs are gumming up the NSA’s IDR process.)
What did CMS’ audit uncover this time?
1.) “The Plan did not apply the No Surprises Act to No Surprises Act-eligible claims for which the Plan was the secondary payor, resulting in a failure to provide disclosures under the No Surprises Act.”
2.) “The Plan did not calculate the QPA in accordance with the rules by excluding contracted rates for contracts under which no claims were filed.”
No surprises there.
The second new audit conducted by CMS was of CareSource, which provides fully insured group health coverage in Indiana. What did regulators find here?
1.) “The Issuer failed to provide QPA disclosures with initial payments or notices of denial of payment for No Surprises Act-eligible services. There were 735 occurrences.” (emphasis ours)
2.) “The Issuer failed to provide certain information about the QPA in a timely manner upon request of the provider or facility.”
3.) “The Issuer failed to calculate the QPA using the Issuer’s contracted rates and instead used the Usual and Customary Rate. There were 952 occurrences.” (emphasis again ours)
Again, color us surprised.
Each of these audits is worth a full read to see what is really happening nationwide: health insurers are not complying with the No Surprises Act’s requirements across the board. And they are facing no enforcement or consequences.
This leads us to our final point, as alluded to earlier. Last month, Rep. Frank Pallone introduced the Lower Premiums, Faster Payments Act, which, he argues, will “fix” the No Surprises Act’s arbitration process (i.e., federal IDR). There are frankly too many absurdities with this proposal to spell out here.
But it’s very relevant to highlight that Rep. Pallone is saying that audits will be a key tool in his proposal to hold health insurers accountable. His legislation calls for “annual audits” from “not less than 25 group health plans and health insurance issuers offering group or individual health insurance.”
Sound familiar? If so, that’s because these are the same audit requirements that the existing No Surprises Act has in place.
These audits are just not happening in accordance with regulatory requirements. And as we see above, when they actually do happen, they find health insurers breaking the law at nearly every turn with no resulting change in behavior. That’s a spooky situation, and it’s one that federal agencies need to fix quickly.