Federal Agency’s Efforts to Eliminate Surprise Medical Bills Suffer Major Setback

As President Donald Trump concluded his first term in early 2021, he enacted legislation aimed at shielding Americans from surprise medical bills, stating, “This must end. We’re going to hold insurance companies and hospitals totally accountable.” However, recent budget cuts driven by a push for reduced government spending, spearheaded by billionaire Elon Musk, threaten the viability of the federal office responsible for enforcing the No Surprises Act.

According to Jeff Grant, former deputy director of operations at the federal Center for Consumer Information and Insurance Oversight (CCIIO), approximately 15% of the agency’s workforce was terminated just two weeks ago. This drastic reduction, affecting 82 employees, compromises the agency’s ability to manage an already overstretched system designed to handle disputes related to out-of-network medical bills. Grant described the situation as a “hot mess” and indicated that the disruptive layoffs have left staff reeling.

The ramifications of these cuts are still emerging, but they jeopardize the development of essential regulations meant to hasten the resolution of disputes involving surprise bills between health plans and medical providers. Grant, who recently retired after over four decades in government service, criticized the layoffs in an emphatic letter to the acting human resources director, labeling them a “grievous error” executed without consideration for employee qualifications or agency needs. Health insurers have echoed concerns regarding the potential regression in the agency’s capacity to address surprise billing issues.

Catherine Howden, a spokesperson for the Centers for Medicare & Medicaid Services (CMS), which oversees the CCIIO, insisted the agency remains committed to enforcing the No Surprises Act and will continue its essential functions. Established by the Affordable Care Act in 2010, the CCIIO is tasked with ensuring that health insurance plans comply with standards designed to protect patients.

The No Surprises Act, enacted in 2020, expanded the responsibilities of the CCIIO, particularly concerning the intricate processes needed to safeguard patients from unexpected medical bills. This bipartisan support stemmed from numerous reports of patients receiving exorbitant bills from out-of-network providers even when treated at in-network facilities. Trump had previously pledged to eradicate surprise medical billing, stating that “the days of ripping off patients are over.”

While the law prohibits most medical providers from pursuing patients over surprise bills, the recent staffing cuts do not directly challenge this provision. However, the CCIIO’s efforts to refine its independent dispute resolution system—created under the No Surprises Act to mediate disagreements between health plans and providers—now face uncertainty. This system has seen an influx of cases, with more than 650,000 disputes recorded in 2023 alone, according to a recent study.

Jennifer Jones, legislative policy director at the Blue Cross Blue Shield Association, noted the significant protection the No Surprises Act has afforded millions but emphasized that inefficiencies in the dispute resolution process are escalating costs for patients and employers alike. A consumer reporting mechanism intended for patients to voice grievances about surprise billing practices has also been overwhelmed.

Under the Biden administration, new rules aimed at streamlining the dispute resolution process were in development. Experts like Jack Hoadley, an emeritus research professor at Georgetown University, expressed optimism that these rules could enhance the resolution of out-of-network claims. Yet, with the departure of the senior official overseeing this initiative and the recent job cuts, the future remains uncertain. Grant indicated that while some displaced employees may be recalled, the overall situation remains dire. Additionally, impending further budget cuts mandated by the White House could exacerbate the challenges faced by the CCIIO and its mission to protect consumers from surprise medical billing.