What Is the No Surprises Act?

While the debate over healthcare continues, there is at least one bipartisan bill that has recently passed, offering some hope. The No Surprises Act came into effect on January 1, 2022, with the goal of tackling the increasing cost of surprise medical bills that millions of Americans receive annually.

These unexpected bills can arise when patients receive treatment from out-of-network providers, and they have been shown to occur in at least 1 in 5 emergency room visits, where patients often have limited choice of provider.

The No Surprises Act prohibits hospitals from sending surprise medical bills to patients with health insurance for out-of-network emergencies. This aims to provide relief to patients who may already be burdened with the cost of medical emergencies, without having to worry about surprise bills.

4 Protections of the No Surprises Act

  1. Requires healthcare providers and facilities to explain billing protections
  2. Bans surprise bills for most emergency services
  3. Bans out-of-network charges and balance bills for certain additional services
  4. Bans out-of-network cost-sharing

The No Surprises Act focuses mainly on individuals with private or employer-sponsored healthcare plans. According to the Congressional Budget Committee (CBO), this law will save consumers over $34 billion per year by lowering premiums and cost sharing. This legislation will undoubtedly assist millions of Americans, making healthcare more affordable and protecting them from excessive bills when they need medical assistance the most.

What Is the No Surprises Act?

In December 2020, Congress passed the No Surprises Act as part of the larger 2021 Consolidated Appropriations Act that also approved $12 billion in COVID relief spending. The bill received bipartisan support, with an equal number of Republican and Democratic committee members. This federal law offers protection to those with private health insurance, employer-sponsored plans, or government-run Health Insurance Marketplace plans.

The primary targets of the No Surprises Act are surprise medical bills from out-of-network emergency services and out-of-network air ambulance services. Previously, both in-network and out-of-network emergency services were allowed to bill at their listed rates. However, out-of-network emergency services have higher rates than in-network services, resulting in higher copays, deductibles, and coinsurance rates.

Many hospitals contract with providers for certain services, and these doctors bill the hospital for their work at out-of-network prices. When patients receive emergency care, they often see multiple providers, and they may not have a choice in who serves them. These out-of-network bills are often unexpected and leave patients with large balances that they cannot afford to pay.

This law applies only to states that do not already have similar consumer protections. If a state law provides better protection than the No Surprises Act, it will be honored as long as it covers the same provisions as the federal law. The Department of Health and Human Services (HHS) will evaluate each state’s surprise billing laws to ensure they meet or exceed federal guidelines. States with protections that don’t meet the new guidelines will fall under federal law.

In states like Maryland, which use an All-Payer model to set costs for out-of-network prices and cost sharing, this model will be followed instead of the federal law. Over half the states have laws protecting consumers from surprise billing, but there is a great deal of variation from state to state, which led to the passage of the No Surprises Act.

What Is a Surprise Medical Bill?

Surprise medical bills are bills received from out-of-network providers during visits to in-network facilities. This often occurs with emergency services where patients enter in-network hospitals but receive care from out-of-network providers like emergency room physicians or anesthesiologists. Even if patients have little choice in their care providers, they still end up with a large unexpected bill.

This issue can also affect those without health insurance or those who choose to self-pay for medical services. In such situations, medical providers should offer a good faith estimate of their services, including the full range of care, such as procedures, lab testing, anesthesia, and medications. If the final charges are much higher than the estimate, it is considered a surprise medical bill.

4 Protections of the No Surprises Act

There are four main provisions of the No Surprises Act that help combat surprise medical bills.

1. Requires health care providers and facilities to explain billing protections

Healthcare providers must give patients information about the new billing protections. Patients have the right to know what to do and who to contact if they believe their rights have been violated.

Providers must inform patients that the only way these protections won’t cover them is if they choose to waive them and give prior billing authorization to an out-of-network provider.

However, this waiver is not allowed for emergency services or additional services that may arise during an emergency visit, such as care from specialists or lab work. The information provided must be easy to read and understand, and consent to waive rights must be given at least 72 hours before care is given.

2. Bans surprise bills for most emergency services

Emergency services are the main source of surprise medical bills. This type of care can be received in emergency rooms or urgent care facilities that provide emergency medicine. The No Surprises Act aims to ban surprise bills for most emergency care. Instead, the cost must be covered by the patient’s health plan by applying in-network cost sharing. Even for certain services provided by out-of-network providers, they cannot charge more than in-network pricing.

3. Bans out-of-network charges and balance bills for certain additional services

Balance billing happens when a health care provider charges more than the allowed amount by your insurance company and passes on the extra cost to the patient. This mainly happens with out-of-network providers who don’t have a contract with the patient’s insurance company.

For example, if a procedure costs $500, but your insurance only covers $300 for that particular service, you’ll get a balance bill for the remaining $200. The No Surprises Act bans balance billing when patients visit an in-network medical center for non-emergency services, but receive additional services from an out-of-network provider that they didn’t choose. It also applies to emergency services received from either an in-network or out-of-network facility.

Although 33 states currently have laws to protect patients from balance billing, the coverage is inconsistent. The No Surprises Act ensures that all insured Americans, regardless of their location, are protected from unfair balance billing.

4. Bans out-of-network cost-sharing

Cost-sharing refers to the portion of services that a health plan covers, and that the policyholder must pay for. This cost can include deductibles, coinsurance, and copays. Previously, out-of-network providers charged higher cost-sharing fees than in-network providers. However, the No Surprises Act now bans these out-of-network cost-sharing fees for most emergency and some non-emergency services, requiring them to only charge in-network rates.

Under the old system, patients received a bill from out-of-network providers for the full, undiscounted cost of their services. Patients then had to file a claim with their insurance provider to receive reimbursement.

With the new law, out-of-network providers must now send bills directly to the patient’s insurance company and receive in-network rates. Only after this has happened can the provider send a cost-sharing bill to the patient at the in-network rate. Insurance providers who continue to charge at out-of-network prices will receive a $10,000 fine for each occurrence.

How to Resolve a Billing Dispute

The No Surprises Act makes it easier to dispute medical bills. However, the process differs depending on whether you have health insurance.

If you pay for medical services yourself, your healthcare provider should have given you an estimate of the costs beforehand. If the final bill is over $400 more than the estimate, you can file a claim within 120 days. In this process, a third party will assist you with arbitration to review your estimate and bill and help you resolve your dispute.

For those with health insurance, you can appeal a charge or a denied claim that you feel goes against the No Surprises Act. You can get free help filing a complaint by calling the No Surprises Help Desk at 1-800-985-3059. You will need to provide documentation like bills, good-faith estimates, or medical records.

The helpline can investigate instances where federal law or policy is not being followed, provide general information, answer questions, and guide you on what documentation is needed and what your next steps should be to file a claim. However, they cannot force an insurance company to pay or adjust charges, or tell you the exact amount you are owed.

Consumers can also contact their state-level Consumer Assistance Program (CAP), originally established under the Affordable Care Act (ACA). These CAPs can help you understand your bills, assist you in filing a claim, and resolve issues with your insurance provider.

Medicare and Medicaid

Although the No Surprises Act doesn’t apply to Medicare or Medicaid services, beneficiaries don’t need this protection as they are already covered. The Centers for Medicare and Medicaid Services (CMS) have implemented provisions to safeguard their members against surprise medical bills.

SSDI and SSI beneficiaries are not affected by the No Surprises Act either. These federal health care programs have their own policies in place to protect their members from unexpected medical bills. Other federal health care programs such as TRICARE, Indian Health Services, and Veterans Health Administration plans also provide their members with provisions to prevent surprise medical bills.

No Surprises Act

Every individual needs access to a comprehensive healthcare plan that includes coverage for essential medical services and emergency care. Unfortunately, surprise bills, out-of-network expenses, and balance billing have led to unexpected and high medical costs for many consumers.

Approximately 40 million people with private or employer-sponsored healthcare visit emergency rooms each year, and they should not be burdened with excessive medical bills during a time of crisis. The No Surprises Act aims to reduce these costs that are primarily associated with emergency care services.