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The Lower Premiums, Faster Payments Act proposes changes to existing federal laws governing surprise medical billing in private health insurance. Currently, when patients receive care from out-of-network providers unexpectedly, disputes over payment amounts can be resolved through an independent dispute resolution (IDR) process. This bill eliminates the IDR process for services furnished on or after January 1, 2028. Instead, it establishes a new method for calculating the 'qualifying payment amount'—the benchmark payment rate for out-of-network services—based on median contracted rates from 2019, adjusted annually by inflation. This aims to create more predictable and standardized payment rates.

The bill applies these changes across three major laws: the Public Health Service Act, the Internal Revenue Code, and the Employee Retirement Income Security Act, ensuring consistency in surprise billing rules across different types of health plans. It also includes provisions for annual audits of claims data to monitor compliance and transparency. Additionally, the bill sets deadlines for payments to providers after claims are submitted, aiming to speed up payment processes.

By removing the IDR process and adjusting payment calculations, the bill seeks to reduce administrative costs and disputes that can drive up insurance premiums. Faster payments to providers may improve cash flow and reduce billing delays. However, some providers and patient advocates may be concerned that the new payment benchmarks could lead to lower reimbursements for out-of-network care, potentially limiting provider options or shifting costs to patients. Overall, the bill affects private health insurers, healthcare providers, and insured patients by changing how surprise medical bills are handled starting in 2028.