How the No Surprises Act may be incentivizing chaos in the ER – or just coinciding with it – and what it means for plans and stop-loss carriers

The ER isn’t broken. It’s complicated.

Emergency departments across the country are increasingly jammed with patients. Long wait times. Hallway beds. Delayed admissions. The usual suspects—staffing shortages, discharge delays, behavioral health bottlenecks—are well known. But another, less discussed possibility lurks behind the scenes: could the No Surprises Act (NSA) be nudging some providers to keep patients in the ER just a little longer?

It’s a question worth asking.

A Quick Refresher: What the No Surprises Act Is Really About

The No Surprises Act, effective January 1, 2022, was designed to protect patients from receiving unexpected medical bills—particularly in emergency situations or when they unknowingly receive care from out-of-network providers.

The law requires:

• Patient cost-sharing to be based on in-network rates for covered services, even when providers are out-of-network.
• Providers and insurers to resolve payment disputes via an arbitration process called Independent Dispute Resolution (IDR)—keeping the patient out of the financial crossfire.

At the center of these disputes is the Qualifying Payment Amount (QPA), defined as the insurer’s median in-network rate for a service in a geographic area. The QPA is meant to anchor arbitration decisions.

However, arbitrators are allowed to consider additional factors beyond the QPA, such as:

• The provider’s level of training and experience
• Case complexity
• The market share of the provider and the plan
• Previous contracted rates, if they existed
• Demonstrated good faith efforts (or lack thereof) to contract

What they cannot consider:

• Medicare, Medicaid, or other government rates
• Billed charges or usual and customary rates

In practice, though, many arbitrators appear to give more weight to the provider’s submitted rate—especially when supported by documentation—leading to outcomes far above the QPA.

Boarding: A Clinical Challenge, or a Financial Strategy?

“Boarding” is when patients who need to be admitted remain stuck in the emergency room because inpatient beds aren’t available—or, perhaps, because there’s no urgency to move them.

Critics of this theory argue it’s offensive to suggest hospitals would delay care for money. They point out that ER boarding strains staff, reduces ER capacity, and increases the risk of poor outcomes. It hurts operational efficiency and burns out clinical teams. Many hospitals don’t benefit directly from NSA arbitration at all—those wins go to third-party ER groups.

Fair points.

But here’s what we also know: under the NSA, emergency services delivered by out-of-network providers are shielded from balance billing, and arbitration rulings heavily favor those providers. In fact:

• Providers win approximately 85% of IDR disputes in emergency and radiology services.
• Arbitration awards frequently exceed 3 to 6 times Medicare rates.
• In some cases, emergency claims have been paid at 4x the Qualifying Payment Amount (QPA) or more.
• Private equity–backed provider groups—such as TeamHealth, SCP Health, and Envision—account for the majority of arbitration filings and have been disproportionately successful.
• One study found that emergency-related arbitration awards average over 4.0× Medicare, and imaging services exceed 6.6×.

So while hospitals may not be getting the NSA windfall directly, they’re not necessarily fighting against it either. While there’s no public documentation of hospitals selecting physician groups based on their arbitration performance, the financial alignment is worth watching. In fact, one might wonder—when hospitals put emergency physician contracts out to bid, could there be a temptation to consider not just clinical outcomes, but also the financial upside those groups might bring through aggressive billing strategies? In fact, one might wonder—when hospitals put emergency physician contracts out to bid, are they ever tempted to consider not just clinical outcomes, but financial arrangements too? Could the allure of shared upside from aggressive billing practices quietly influence how those relationships are chosen? When a patient lingers in the ER, billing opportunities multiply: observation codes, consults, imaging—all billed under the protected “emergency” designation. Once a patient is admitted, those NSA protections taper off, and payment reverts to standard in-network contract rates. The financial incentive to delay admission? It exists, even if rarely acknowledged—and its influence deserves scrutiny.

Profit by Delay, or Just Dysfunction?

Let’s be clear: no one is saying all or any hospitals are doing this. Many are desperately trying to offload patients to free up space and reduce ER wait times. But when financial patterns coincide with clinical behaviors, even unintentionally, we have to ask hard questions.

Boarding may still be caused by capacity issues, but in some settings, it may also be a convenient byproduct of favorable reimbursement mechanics. Especially when arbitration is yielding rich payouts, and no party involved has much incentive to admit quickly.

Meanwhile, patients suffer. Employer plans groan under rising aggregate claims. And stop-loss carriers face growing exposure tied to emergency billing that looks more like inpatient care in disguise.

Final Thought: Coincidence, Convenience, or Something More?

The NSA wasn’t meant to create a financial incentive to keep patients in emergency status. But incentives shape behavior, even if slowly and subtly. It’s time we ask whether emergency room boarding is just a crisis of resources—or a byproduct of economics. Either way, it’s costing more than we think.

If you’re seeing similar claim patterns, let’s connect. There’s more here than meets the eye—and a new playbook may be needed.