No Surprises Act

What is the No Surprises Act?

The No Surprises Act is a federal law that took effect January 1, 2022, to restrict many instances of “surprise” medical bills. The legislation was included in the Consolidated Appropriations Act, 2021,¹ which was signed into law by President Trump in December 2020, after receiving strong bipartisan support in Congress.

The Biden administration spent much of 2021 working on implementation of the new law, with various interim final regulations and final regulations issued. An overview of the rulemaking process for the No Surprises Act is available on the CMS website,² and CMS also has a helpful overview page, explaining various details of the No Surprises Act.³

What are surprise medical bills?

The term “surprise medical bills” is a common reference to “surprise balance billing.” Balance billing happens when a medical provider, usually an out-of-network provider, sends a patient a bill for their services, beyond the amount (if any) the patient’s health insurance paid. Surprise balance billing refers to two types of situations in which the patient has little to no control over whether they’re treated by an out-of-network provider. In both of these scenarios, consumers are now protected from receiving surprise bills from out-of-network providers:

• Emergencies. In an emergency, an ambulance may take a patient to the closest emergency room that’s accepting patients. This emergency room may or may not be in-network, and it may or may not have out-of-network providers caring for patients. But the patient is not always in a position to determine whether the care they’re receiving is in-network. Under the No Surprises Act, consumer protections also extend to post-stabilization care immediately following the stabilizing treatment provided in the emergency department, until the patient can consent to be transferred to an in-network facility and is able to safely travel there using non-medical transportation.⁴
• Non-emergency situations in which the patient goes to an in-network hospital but is unknowingly treated by an out-of-network provider. For example, you might choose an in-network hospital for your planned surgery, but not realize that the radiologist or anesthesiologist, or assistant surgeon isn’t in your insurance network. In some cases, you might never interact with this provider at all.⁴ (“Facility” refers to hospitals, hospital outpatient departments, critical access hospitals, and ambulatory surgical centers. Out-of-network care received at other types of in-network medical provider locations is not subject to the No Surprises Act.)

Before the No Surprises Act went into effect, in those scenarios, it was not unusual for patients to receive an unexpected (“surprise”) balance bill for the care that they unknowingly received from a medical provider who wasn’t in their insurance plan’s network.

How common were surprise medical bills?

Various studies indicated that about  20% of emergency room visits resulted in surprise medical bills from out-of-network providers.⁵ And up to 16% of in-network hospitalizations resulted in surprise balance bills from out-of-network providers who participated in the patient’s care.

A study by America’s Health Insurance Plans and the Blue Cross Blue Shield Association determined that the No Surprises Act prevented 2,000,000 potential surprise bills in just the first two months of 2022.⁶

How does the No Surprises Act protect consumers?

Under the No Surprises Act, out-of-network providers cannot send a patient a surprise balance bill for emergency treatment or for out-of-network care provided at an in-network hospital. Instead, the patient can only be charged their regular in-network cost-sharing amounts. And health plan ID cards must display the plan’s in-network deductible and out-of-pocket maximum, so that the information is readily available.

Note that the law doesn’t change anything about how claims are processed in general, so insurers can still deny claims depending on the circumstances (and the normal appeals process would apply in that case). But assuming the care is covered under the plan, the out-of-network care has to be billed — from the consumer’s perspective — as if it’s in-network.

And in additional guidance that was issued in 2023,⁷ CMS clarified that for scenarios covered under the No Surprises Act (emergencies or out-of-network providers at in-network facilities) the patient must either be protected by the in-network maximum out-of-pocket cap, or by the No Surprises Act’s surprise balance billing protections. There can’t be a scenario in which the health plan claims that neither of those provisions is applicable due to a “participating” provider contract that’s still out-of-network. This helps to prevent the sort of scenario described in this story.

Since an out-of-network provider does not have a contract-negotiated rate with the insurance company, the provider and the insurer then have to work out an acceptable payment rate, without having the patient caught in the middle. If the provider and the insurer can’t reach an agreement, there’s an Independent Dispute Resolution (IDR) process that either party can request.

The IDR is moderated by an Health and Human Services-certified third party. Both the provider and the insurer submit their best offer, and the IDR entity decides which one to accept. The losing party has to pay the IDR fee, and likely has to accept a payment rate that’s worse (from their perspective) than what they would have had if the earlier negotiation process had been successful. So there is an incentive for providers and insurers to reach an agreement on payment rates without activating the IDR process.

Some aspects of the IDR process were challenged in court by some medical providers, and a judge ruled in their favor⁸ in February 2022. The final rule that the Centers for Medicare and Medicaid Services (“CMS”) issued in August 2022⁹ took into account the fact that certain aspects of the IDR process that had been clarified in prior guidance were vacated by that court ruling. The No Surprises Act and the rest of the federal rules for its implementation remain intact. But there are concerns that the vacated provisions of the IDR process were included in order to hold down health care costs and insurance premiums, and that without them, costs and premiums will rise.

There is a $50 administrative fee that each party must pay if a payment dispute is initiated under the IDR process. This fee had increased to $350 as of January 2023, but a court ruling overturned that price increase on August 3, 2023, and the fee has been reset to $50.

How did the No Surprises Act help Marketplace plan buyers?

All health plans sold in the Marketplace/exchange are subject to the No Surprises Act’s regulations. This means that consumers who purchase coverage through the Marketplace can rest assured that they will not receive surprise medical bills if they go to an in-network hospital, or if they receive care from an out-of-network medical provider in an emergency department.

Does the No Surprises Act protect against all surprise medical bills?

No. Ground ambulance providers, which are a significant source of surprise balance billing, are not regulated under the No Surprises Act.

But the law did call for the creation of a committee to study ground ambulance charges and consumer protections against surprise balance billing for ground ambulance charges could be addressed by future legislation, with specifics based on the committee’s findings. The Advisory Committee on Ground Ambulance and Patient Billing (GAPB) began meeting in May 2023.¹⁰

The GAPB Committee adopted recommendations in late 2023 that call for out-of-pocket ambulance charges to be capped at no more than $100 per trip.¹¹ However, it would take an act of Congress to implement those recommendations, so nothing has changed for now.

States can take action to limit or prevent surprise balance billing for out-of-network ground ambulance charges, but state rules do not apply to self-insured health plans, and the majority of people with employer-sponsored health coverage are in self-insured plans.¹²

With that said, 14 states have implemented rules to protect consumers from surprise balance billing for ground ambulance services,¹³ and Indiana will join them in 2025¹⁴
under the terms of new legislation the state enacted in 2024.¹⁵

In most of those states, the rules are applicable regardless of whether the ambulance service is public or private, although Colorado and Maryland only protect against surprise balance billing for private ambulance services (nationwide, most ground ambulance services are public — fire departments or government entities — rather than private).¹⁶ And in Florida, the current protections only apply to HMOs.

In both Florida and Colorado, legislation is under consideration in 2024 that would extend the existing protections (see details below).

Several states are considering legislation in 2024 that would regulate or prohibit surprise balance billing for ground ambulance services when patients have state-regulated health insurance:

• Alabama¹⁷
• Colorado¹⁸ (extend protections to include public ambulance services)
• Connecticut¹⁹
• Florida (2024 bills to extend protections to non-HMOs died in committee)²⁰ 
• Illinois²¹
• Indiana (legislation enacted, takes effect in 2025)¹⁵
• Mississippi²²
• New Hampshire²³
• Oklahoma²⁴
• Rhode Island²⁵
• Washington (legislation passed in March 2024 and sent to governor)²⁶
  

Can patients still receive balance bills under the No Surprises Act?

Yes, depending on the circumstances. As noted above, the No Surprises Act does not apply to ground ambulance services. It also doesn’t apply to situations in which a patient chooses to use an out-of-network provider (as opposed to situations in which the patient had no choice or was unknowingly treated by an out-of-network provider at an in-network facility). So if a person goes to an out-of-network facility or doctor in a non-emergency situation, balance billing can still be expected, and a health plan’s normal rules for out-of-network coverage would be applied.

And in limited non-emergency situations, out-of-network medical providers can ask patients to waive their rights under the No Surprises Act. In that case, if the patient agrees to the out-of-network charges, they can still receive a balance bill from an out-of-network provider. And the out-of-network medical provider can refuse to provide treatment if patients don’t waive their balance billing protections.

But waivers are not allowed in the majority of scenarios that generate surprise balance billing, including emergency care, ancillary services (including anesthesiology, pathology, radiology, and neonatology), assistant surgeons, intensivists, and hospitalists, radiology and lab work, and situations in which there is no in-network provider available at the facility who can administer the necessary care. In other words, the waiver of rights form can only be used if the patient is genuinely being given the option to use an in-network provider and decides to use the out-of-network provider instead.

What can I do if I think I’ve received a surprise medical bill?

If you receive a surprise medical bill from an out-of-network provider and you believe that the No Surprises Act’s rules are applicable to the situation, you should contact the provider who sent you the bill.

The dispute resolution process (described above) will be used after you contact your provider about the bill.  The medical provider should tell you to disregard the additional out-of-network charges and instead initiate the dispute resolution process with your health plan. You should no longer be in the middle of it as the patient. If you need additional help in getting the bill redirected, you can reach out to your state department of insurance (for state-regulated health coverage) or the U.S. Department of Labor (for self-insured group health plans).

Keep in mind that your medical plan has to be subject to the No Surprises Act, and the Act wouldn’t apply, for example, if you have short-term health insurance.

As described below, there is also a dispute resolution process if you’re uninsured and the bill you receive is significantly higher than the good faith estimate you were given.

Do the No Surprise Act’s consumer protections apply to all plans?

For the most part, yes. The surprise balance billing protections apply to employer-sponsored health plans and individual/family health plans, including plans purchased in the Marketplace as well as plans purchased directly from an individual market health insurance carrier.

The law is applicable to plan or policy years that start on or after January 1, 2022. Most health plans, including all plans sold in the ACA-compliant individual market and the majority of employer-sponsored plans, renew on January 1. For those plans, the new rules took effect on January 1, 2022. But for a plan that doesn’t follow the calendar year, including some grandfathered health plans and some employer-sponsored health plans, the new rules took effect on whatever date in 2022 that their plan year began.

The surprise balance billing protections of the No Surprises Act and implementing regulations don’t apply to plans that aren’t employer-sponsored coverage or individual market coverage. There are, however, proposed rules related to the No Surprises Act that would require issuers of short-term health coverage to disclose details about broker compensation to enrollees and to the Department of Health and Human Services.

Does the No Surprises Act help people with Medicare or Medicaid?

The No Surprises Act doesn’t apply to Medicare, Medicaid, VA coverage, or Indian Health Services coverage. Nonetheless, there were already rules in place to prevent unexpected medical bills from providers and facilities that participate in these programs when the Act was enacted.

Does the No Surprises Act help me if I don’t have health insurance?

Yes. As of January 2022, medical providers have to provide uninsured or self-pay patients with an itemized good-faith estimate of medical costs (including facility fees), upon request or after the service is scheduled.²⁷ This applies to people who don’t have health insurance as well as those who plan to self-pay rather than submit a claim to an insurance plan. People with various types of non-ACA-compliant coverage, including health care sharing ministry plans, are considered self-pay patients.

There’s also a dispute resolution process for uninsured/self-pay consumers, which can be initiated if the actual bill exceeds the good faith estimate by more than $400.²⁸ There’s a $25 fee for this service, but if the billing dispute is resolved in the consumer’s favor, the fee is paid by the medical provider.