HCA 320 Module 3 assignment: applied paper: how a health policy is developed and changed, a full sample

From Headlines to Law to Court: How the No Surprises Act Was Made and Remade

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Health Care Administration Program, Aspen University

HCA 320: Healthcare Policy and Economics

Instructor Name

Month Day, Year

From Headlines to Law to Court: How the No Surprises Act Was Made and Remade

Health policy is not made once; it is proposed, bargained over, enacted, written into regulations, challenged, and revised. The federal law that ended most surprise medical bills shows each of those stages within a few years. This paper describes the problem the law addressed, uses Kingdon's multiple streams framework to explain why it passed when it did, identifies the stakeholders who shaped its design, and follows its implementation through rulemaking and litigation, drawing lessons for healthcare professionals who want to influence policy.

The Problem

A surprise bill arises when a patient receives care from a clinician or facility outside their insurance network without choosing to, most often in an emergency or when an out-of-network anesthesiologist, radiologist, or pathologist works at an in-network hospital. The patient may then be billed for the difference between the clinician's charge and what the insurer pays. The problem grew. Analyzing claims from a large commercial insurer, Sun et al. (2019) found that the share of emergency visits with an out-of-network bill rose from 32.3 percent in 2010 to 42.8 percent in 2016, and the share of inpatient admissions with such a bill rose from 26.3 to 42.0 percent. Cooper et al. (2020) found that at in-network hospitals, 11.8 percent of anesthesiology care and 12.3 percent of care involving a pathologist were billed out of network, and argued that the ability to bill out of network let these specialists negotiate higher in-network rates as well.

Why It Passed When It Did: Kingdon's Three Streams

Kingdon (2011) argued that policy change happens when three largely independent streams come together. The problem stream is the recognition of a condition as a problem requiring action. The policy stream is the set of proposed solutions developed by specialists. The political stream includes public mood, elections, and the balance of interests. When the three meet, a window opens, and policy entrepreneurs can push a proposal through.

Each stream was in place by 2019 and 2020. In the problem stream, studies like those above, along with widely reported patient stories of bills for thousands of dollars after emergencies, made surprise billing a visible problem. In the policy stream, many states had already passed their own protections, which gave federal legislators tested models, but state laws could not reach self-funded employer plans governed by federal law, which left many patients unprotected and created a clear federal role. In the political stream, the issue was unusual in drawing concern from both parties, since protecting patients from unexpected bills was popular across the political spectrum. The window opened at the end of 2020, when the protections were included in the Consolidated Appropriations Act, 2021, a large spending bill that had to pass. Bipartisan appeal got the idea onto the agenda; a must-pass bill got it into law.

Stakeholders and the Fight Over Design

Agreement on protecting patients did not mean agreement on who would pay. The central design question was how to set payment for out-of-network care once patients were held harmless. Insurers and many employers favored a benchmark, paying out-of-network clinicians based on typical in-network rates, which would limit their costs. Physician groups, hospitals, and physician staffing companies opposed a benchmark and favored independent arbitration, which they expected to produce higher payments. The final law adopted arbitration, called independent dispute resolution, in which an arbiter chooses between the insurer's and the provider's offers, while directing the arbiter to consider the qualifying payment amount, generally the insurer's median in-network rate, along with other factors. The compromise reflected the political strength of both sides.

What the Law Does

The No Surprises Act took effect on January 1, 2022. It protects patients from surprise bills for emergency services, for nonemergency services from out-of-network clinicians at in-network facilities in most circumstances, and for air ambulance services. Patients pay only their in-network cost sharing, and payment disputes are settled between providers and insurers. Uninsured and self-pay patients have a right to a good faith estimate of expected charges (Centers for Medicare & Medicaid Services [CMS], 2025). Ground ambulance services were not covered by the main protections, one of the law's notable gaps.

Implementation and Change After Enactment

Enactment was not the end of policymaking. Three federal departments had to write regulations explaining how the arbitration process would work. Provider groups challenged those rules in federal court, arguing that they told arbiters to give too much weight to the qualifying payment amount, and federal courts in Texas set aside parts of the rules. The departments revised them. The dispute over how much weight the benchmark should carry, which Congress had resolved by compromise, returned through rulemaking and litigation. The episode illustrates a general point: stakeholders who lose in the legislature often continue the contest in regulation and the courts.

Advocacy for the Patients the Law Missed

The law's gaps show where advocacy can still matter. Ground ambulance bills were left out of the main protections, although patients rarely choose which ambulance comes for them, and Congress directed an advisory committee to study the issue instead. Patients in that situation have the same lack of choice that justified the law in the first place. A healthcare administrator or professional association that documents local ground ambulance billing, collects patient cases, and brings them to state legislators or members of Congress would be following the same path that produced the original law: evidence in the problem stream, a model solution in the policy stream, and a push when the political stream allows.

Lessons for Healthcare Professionals

Three lessons follow for professionals who want to influence policy. First, evidence moves problems onto the agenda: the studies documenting out-of-network billing gave legislators numbers to cite. Second, the details are where interests are decided, so engaging during drafting and rulemaking, through comment letters and professional associations, can matter as much as supporting a bill's passage. Third, patient stories carry weight, and clinicians and administrators who see the effects of policy directly can provide them. Administrators also have an operational role: hospitals must now give notices and good faith estimates and ensure their contracted physicians comply, so policy knowledge is part of the job.

Conclusion

The No Surprises Act moved from a documented problem to federal law when Kingdon's three streams converged: rising out-of-network billing, tested state models with a clear federal gap, and bipartisan politics, carried by a must-pass bill. Its design reflected a compromise among insurers, employers, and providers, and that compromise was reopened in rulemaking and court. Policy is developed and changed continuously, and those who understand the process can take part at every stage.

References

Centers for Medicare & Medicaid Services. (2025). No surprises: Understand your rights against surprise medical bills. https://www.cms.gov/nosurprises

Cooper, Z., Nguyen, H., Shekita, N., & Scott Morton, F. (2020). Out-of-network billing and negotiated payments for hospital-based physicians. Health Affairs, 39(1), 24-32. https://doi.org/10.1377/hlthaff.2019.00507

Kingdon, J. W. (2011). Agendas, alternatives, and public policies (Updated 2nd ed.). Longman.

Sun, E. C., Mello, M. M., Moshfegh, J., & Baker, L. C. (2019). Assessment of out-of-network billing for privately insured patients receiving care in in-network hospitals. JAMA Internal Medicine, 179(11), 1543-1550. https://doi.org/10.1001/jamainternmed.2019.3451