The debate over healthcare may seem never-ending, but there has been at least one bipartisan bill passed recently that may offer a bit of hope. The No Surprises Act went into effect on January 1, 2022, and aims to address the mounting cost of surprise medical bills that millions of Americans receive every year. The No Surprises Act prevents hospitals from sending surprise medical bills to patients with health insurance for out-of-network emergencies. These unexpected bills have been shown to occur in at least 1 in 5 emergency room visits when patients frequently have little choice of provider.

 4 Health Insurance Protections of the No Surprises Act

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

This new law primarily covers those with private or employer-sponsored health care plans, and the Congressional Budget Committee (CBO) estimates it will save consumers over $34 billion a year in reduced cost sharing and premiums. The No Surprises Act will no doubt help millions of Americans be able to afford the mounting cost of health care and protect them from exorbitant bills when they most need it.

What Is the No Surprises Act?

The No Surprises Act was first enacted by Congress in December of 2020 to address the rising costs of surprise medical bills. It was a part of the larger 2021 Consolidated Appropriations Act which approved $12 billion in COVID relief spending. The bill received bipartisan support and the committee that chaired the bill included equal members of republicans and democrats. This new federal law protects those with private health insurance, employer-sponsored plans, or plans purchased through the government-run Health Insurance Marketplace.

This law targets surprise medical bills from out-of-network emergency services and out-of-network air ambulance services. Previously, any emergency service, both in-network and out-of-network, were allowed to bill at whatever rates they had listed in each individual plan. The rates for out-of-network emergency services are almost always higher than in-network, with higher copays, deductibles, and coinsurance rates.

When people go to medical centers that are in-network on their plan (such as a hospital) they have a reasonable expectation that their plan will cover emergency services at in-network prices. However, just because you’re at an in-network facility doesn’t mean that all providers within the facility are also in-network.

Many hospitals contract with providers for certain services but those doctors don’t actually work for the hospital and instead bill the hospital for their work at out-of-network prices. When people receive emergency care, they will often see more than one provider and not consider (or have a choice) which provider serves them. The bills they later receive from these out-of-network providers come as a surprise and often leave consumers with a large balance due they cannot afford to pay.

In cases where there is an existing state law that offers the same or better consumer protection against these costs, the state-level law will be honored as long as it can show that it covers the same provisions that the No Surprises Act does. The Department of Health and Human Services (HHS) will evaluate each state’s surprise billing laws to ensure they meet or exceed federal guidelines. Over half the states in the country have some sort of law that protects consumers from surprise billing, though there is tremendous variation from state to state which led to the passage of the No Surprises Act. Some states, such as Maryland, may use an All-Payer model which sets amounts for cost sharing and out-of-network prices and this will generally be followed instead of federal law. In other states with protections that don’t meet the new guidelines, the new federal law will take precedence.

What Is a Surprise Medical Bill?

A surprise medical bill is an unexpected bill from an out-of-network provider. Usually, these are received during visits to in-network facilities where you inadvertently received services from an out-of-network provider. This can often be the case with emergency services where you enter a hospital you know is in-network under your plan, but end up getting care from an anesthesiologist or emergency room physician who isn’t in your network. If you are on vacation and get in a car accident, you don’t really have a choice where to go for emergency care, and that makes you vulnerable to surprise medical bills.

A surprise bill can also come from medical visits for those who don’t have health insurance or choose to self-pay for their services. In this scenario, a medical provider should give you a good faith estimate for their services and this should include the full range of care they’ll provide including any procedures, lab testing, anesthesia, or medications. If your final charges are substantially higher than the estimate, this is also considered a surprise medical bill.

4 Health Insurance Protections of the No Surprises Act

There are four main provisions of the No Surprises Act to combat the financial burden these bills can have on consumers.

1. Bans surprise bills for most emergency services

The largest source of surprise billing comes from emergency services. This could be care received from emergency rooms or urgent care facilities that can provide emergency medicine. The new act will ban these surprise bills for most emergency care. Instead, the cost must be covered by your health plan by applying in-network cost sharing and they can’t charge more than in-network pricing even for certain services by out-of-network providers.

2. Bans out-of-network cost-sharing

Cost-sharing refers to any services that a health plan covers that the policyholder pays a portion of. You most commonly see cost-sharing in charges like deductibles, coinsurance, and copays. For most plans, there is a predesignated cost-sharing level for in-network providers and out-of-network providers. The No Surprises Act bans these out-of-network cost-sharing charges for most emergency services and some non-emergency services, and instead only allows them to charge in-network rates.

Previously, if a patient received care from an out-of-network provider, that provider would send a bill directly to the patient for the full, undiscounted cost of their service. The patient could then decide to file a claim with their own insurance provider to see what kind of reimbursement they could get. Under the new law, the out-of-network provider must now send this bill directly to the patient’s insurance company which will then work with the provider to pay them at the in-network rate. Only after this has happened can the provider send a cost-sharing bill to the patient under the in-network rate. Insurance providers who continue to charge at out-of-network prices will see a $10,000 fine for each occurrence.

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

Balance billing occurs when your insurance company bills you for the difference between the amount your health care provider charged and the allowed amount. This occurs most often with out-of-network providers that don’t have a contract with your insurance company and try to pass extra costs on to you.

For example, if a certain procedure was billed at $500 but your insurance plan only covers $300 for that particular service, you’ll receive a balance bill for the remaining $200. Under this new act, balance bills are largely banned when you visit an in-network medical center for non-emergency services and receive additional services from an out-of-network provider that you did not choose, or if you receive emergency services from either an in-network or out-of-network facility. While 33 states currently have protections against this type of balance billing, the coverage is uneven. The new No Surprises Act ensures that all insured Americans, no matter where they live, can avoid unfair balance bills.

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

Lastly, the new law requires health care providers to supply patients with information outlining these new billing protections. You have a right to know what to do and who to contact if you feel their protections have been violated.

Providers must let you know that the only way these protections won’t cover you is if you opt to waive them and give prior authorization to being billed by an out-of-network provider. However, this waiver is not permitted for emergency services or additional services that may come up during an emergency visit (such as care from specialists or lab work). This document must be easy to read and understand, and consent to waive your rights must be given at least 72 hours before care is given.

How Do I Resolve a Billing Dispute?

The No Surprises Act provides for easier processes to dispute billing, but this will look slightly different for those who have health insurance and those who self-paid. If you choose to self-pay for services, your healthcare provider will have been required to give you a good-faith estimate of your costs beforehand. If your costs end up being over $400 more than your estimate, you can file a claim within 120 days of receiving your bill. In this new process, you’ll receive third-party arbitration assistance to review your good-faith estimate and bill and help you resolve your dispute.

For those with health insurance, you have the option to appeal a charge or a denial to pay part of a claim that you feel violates the No Surprises Act. All consumers can get free help filing a complaint by calling the No Surprises Help Desk at 1-800-985-3059. In general, you will need to supply documentation that may include bills, good-faith estimates, or medical records. This helpline can give general information, investigate instances where federal law or policy is not being followed, answer questions, and let you know what documentation you need and what your next steps should be to file a claim. However, they cannot force an insurance company to pay or adjust charges, determine the value of a claim, or tell you what amount should be owed to you.

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, help you file a claim, and resolve problems with your insurance provider.

Does the No Surprises Act Affect Medicare or Medicaid?

While the No Surprises Act doesn’t cover those with Medicare or Medicaid services, it actually doesn’t have to because these beneficiaries already enjoy these protections. SSDI and SSI and not affected, either. These two federal health care programs run by the Centers for Medicare and Medicaid Services (CMS) along with TRICARE, and plans run through the Indian Health Services or Veterans Health Administration all have included provisions to protect their members against surprise bills.

No Surprises Act

Everyone needs a health care plan that covers their basic needs and allows for non-emergency services and emergency care when needed. However, it’s become clear that surprise bills, out-of-network cost sharing, and balance billings are contributing to high and unplanned charges for consumers.

Nearly 40 million people visit the emergency room each year who have private or employer-sponsored healthcare and they shouldn’t be burdened with excessive medical billing in their time of crisis. The No Surprises Act hopes to cut down on these costs that come largely from emergency care services.