Surprise medical bills can create significant barriers for patients when it comes to seeking or adhering to recommended care plans. Almost 50% of U.S. adults report that the fear of unexpected medical charges prevents them from seeking necessary treatment.
The No Surprises Act (NSA) was introduced to address this issue. Signed into law as part of the Consolidated Appropriations Act of 2021, this legislation is designed to shield healthcare consumers from the administrative challenges and contract complexities that lead to unexpected medical bills and the emotional distress that accompanies them.
Implementing the No Surprise Act billing practices requires improved coordination between payers and healthcare providers, which has not been typical in the past. A 2021 Healthcare Consumer Experience Study by Cedar, which provides patient financial engagement solutions, surveyed over 1,500 U.S. adults and found that nearly one-third (31%) of patients are dissatisfied with the coordination between providers and payers. However, providers and payers that act quickly to comply with the No Surprises Act could benefit from greater customer loyalty, higher satisfaction, and increased revenue.
- What is the No Surprises Act?
The No Surprises Act is a law passed by Congress, effective as of January 1, which prohibits surprise out-of-network medical charges at in-network facilities, including emergency services. Balance billing and out-of-network cost sharing are also largely banned under the law.
As a result, providers and payers must collaborate to determine appropriate payments for doctors and hospitals, rather than passing the financial burden onto patients. The NSA is expected to reduce surprise medical bills by an estimated 10 million annually.
- Who Does the No Surprises Act Apply To?
The No Surprises Act applies to both healthcare providers and payers. Providers covered by the law include hospitals, ambulatory surgical centers, rural health centers, federally qualified health centers, and air ambulance providers.
Payers affected by the No Surprises Act include both group and individual health plans, as well as grandfathered plans.
- What Does the No Surprises Act Mean for Providers?
Under the No Surprises Act, providers can no longer charge insured patients more for out-of-network services than they would for in-network services, as specified in the patient’s existing plan. The only exception to this rule is ground medical transport.
For uninsured patients, providers must provide a “good-faith estimate” of medical costs, which should include the expected cost for the primary service (e.g., surgery) and any additional expected costs (e.g., anesthesia).
- What Does the No Surprises Act Mean for Payers?
Payers must cover surprise bills at in-network rates, which minimizes the financial impact of receiving urgent or emergency care out-of-network. Insurers are also required to maintain accurate provider network directories, ensuring continuity of coverage and informing patients if a provider is no longer in-network while care is being provided.
The No Surprises Act is expected to lead to a decrease in insurance premiums by about 0.5% to 1%, according to the Congressional Budget Office.
- How Will the No Surprises Act Be Enforced?
Providers and payers who violate the No Surprises Act face civil monetary penalties. Enforcement can be carried out by both federal and state agencies. States primarily handle enforcement with regard to prono sviders, though federal agencies serve as a backup.
For payers, enforcement is largely under federal jurisdiction, with various agencies responsible depending on the type of health plan, including the Department of Labor, Department of Treasury, and the Department of Health and Human Services. States are in charge of enforcement for state-regulated plans.
- What is the Independent Dispute Resolution (IDR) Process?
If providers and payers cannot agree on the cost for out-of-network services, the dispute will be resolved through a federal Independent Dispute Resolution (IDR) process. Patients are not involved in this process. A third-party arbitrator oversees the NSA IDR Process, with payers setting initial price benchmarks.
It’s important to note that disputes can also be handled through the State NSA IDR Process or Federal NSA IDR Process, depending on the location and specifics of the dispute.
- How Can Disputes Between Patients and Providers Be Resolved?
Uninsured or self-pay patients who receive a bill higher than the good-faith estimate they were provided can use a similar dispute resolution process. To qualify, the bill must be submitted within 120 calendar days and exceed $400.
Patients can request a third-party arbitrator to oversee the resolution process, utilizing the NSA IDR Process.
- What’s New Regarding the No Surprises Act?
While the No Surprises Act is officially in effect, several organizations, including the American Medical Association, the American Hospital Association, and various hospitals and providers, have challenged parts of the law—particularly the NSA IDR Process. These groups argue that the current administration’s interpretation may disproportionately favor payers in dispute negotiations, though they support the law’s consumer protection provisions.
A proper understanding of the No Surprises Act and good-faith estimates is crucial to ensure compliance with No Surprise Act billing practices, even in cases of emergency billing. By adhering to these guidelines, providers and payers can avoid balance billing and its negative effects on patients. No Surprise Bill, a leading medical billing company, specializes in ensuring accurate billing practices under the No Surprises Act. Their expertise in the NSA fees and NSA IDR Process will help healthcare providers stay compliant and avoid unnecessary billing conflicts.
