What Is The No Surprises Act?

Find out what the no surprises act is with Healthie. Learn about what the no surprises billing act is and the date it is effective as a law.

No Surprises Act Summary

Even though most Americans are covered by some form of health insurance, surprise bills often result from situations where they have little or no say about who is providing them care. This might occur in the case of an emergency, but it can also happen in other circumstances. Even if a patient is at an in-network hospital, they could unknowingly receive care from an out-of-network provider, such as an anesthesiologist.

If a patient’s health plan doesn’t cover out-of-network care, it may not cover the surprise bill - leaving the patient to pay the full amount. In other cases, they might pay some of it, but the patient may be liable for balance billing (the difference between the undiscounted fee charged by the out-of-network provider and the amount reimbursed by the health plan). 

Currently, a patient can report surprise medical bills by addressing them with their healthcare provider or insurance company, but beyond that they don’t have many options - unless balance billing is already illegal in their state. However, the No Surprises Act will introduce a number of federal-level protections against unexpected medical bills. The main points are: 

Consumer protections under the No Surprises Act

  • Health plans must cover surprise bills at in-network rates. Any service which happens outside of the patient’s control (e.g. an air ambulance) will be covered at in-network rates. That cost will be based on a “recognized amount”, which is usually the median in-network payment amount for the same service under the plan.
  • Balance billing is not allowed for emergency services. An out-of-network provider providing an emergency service can’t send the patient a balance bill higher than the in-network amount.
  • Balance billing is allowed for non-emergency services - with some caveats. Balance bills can be used if the patient signs off on a written notice 72 hours before the service is provided. The notice needs to declare that the provider is not in-network, estimate the out-of-network charge, and provide a price comparison of other providers that the patient could use instead.
  • Out-of-network providers “shall not bill and shall not hold patients liable” for excess charges. Out-of-network providers carry the burden of assessing a patient’s insurance status, and determining the in-network cost for the surprise medical bill.
  • There is now an independent dispute resolution (IDR) process for surprise bills. Providers and insurers have a 30-day negotiation period to settle their out-of-network claims. If they can’t settle within this time, they can choose to go through the federal IDR process.

Other provisions under the No Surprises Act

Beyond these main guidelines, there are some other clauses that advance healthcare transparency. 

  • Health plans must provide an Advance Explanation of Benefits. Before receiving a service, patients can now submit a request to their health plan and receive information about the provider’s network status, the estimated amount that the plan will pay, and the estimated amount they will have to pay.
  • Health plans must provide transitional continuity of coverage. If a provider leaves a network, the law now requires health plans to notify their enrollees who are receiving ongoing care from this provider. In some cases (such as pregnancy or terminal illness), they must continue to provide additional coverage at in-network rates. 
  • Health plans must provide accurate network directories. Health plans must verify their provider directory information at least every 90 days, and respond to requests about whether a provider is in-network within one business day. If they provide incorrect information, patients are often entitled to in-network costs. 

When is the No Surprises Act effective date?

The No Surprises Act comes into effect for health plan years beginning on or after January 1, 2022. It applies to nearly all private health plans offered by employers, including the Federal Employees Health Benefits Program.

What does the law change mean for healthcare providers?

If you’re a healthcare provider acting in good faith, the No Surprises Act likely won’t affect you much. This law is intended to obstruct the small number of providers who use balance billing and surprise billing to charge exorbitant fees for their services. If you are a healthcare provider who is not in-network with insurance, as in cash-based practices, then you (or your practice rates) are not subject to the No Surprises Act.

As insurers will be up to date with directory information, it will streamline the entire healthcare service. Not to mention, increasing transparency in the healthcare system gives patients the freedom and flexibility they deserve, and will likely lead to better health outcomes across the board. 

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