The No Surprises Act (NSA), a landmark healthcare legislation passed by the United States Congress in 2020, addresses the pervasive issue of surprise medical billing, which has long plagued patients (1). Implemented on January 1, 2022, by the Department of Labor, the Department of Health and Human Services (HHS), and the Treasury, the policy aims to protect patients by prohibiting surprise billing (2). Although designed to safeguard the financial security of patients, the NSA has caused significant controversy in the healthcare field. Since it was passed, the No Surprises Act has encountered several legal challenges with implications for patients, providers and insurers (3).
Surprise medical billing occurs when a patient receives an unexpected bill from a medical provider, typically after receiving emergency care from an out-of-network provider or treatment from an out-of-network specialist (4). Several studies have shown that surprise billing arises after around 20% of emergency room visits, as well as between 9% and 16% of in-network hospitalizations that required care from out-of-network specialists whom the patient did not choose (5, 6). These unexpected bills place significant financial strain on patients, as health insurers often deny or only partially cover out-of-network claims (4). Additionally, patients may end up having to negotiate with their insurers, resulting in stress and confusion (4). In the midst of the COVID-19 pandemic, as concern over surprise billing and insurer disputes grew to an unprecedented height, Congress developed the NSA to reduce patients’ financial stress, estimating that the policy would apply to about 10 million out-of-network surprise bills per year (4).
The NSA protects patients from surprise billing through several key provisions: patient cost responsibility limitations, balance billing restrictions, independent dispute resolutions (IDR), and cost transparency requirements (1, 2). First, the NSA established a new mechanism for calculating out-of-network charges based on the median in-network rate, effectively limiting the cost that patients were required to pay (1). Second, the policy prohibited balance billing — a form of surprise billing in which patients must pay the difference between the cost of services and the cost covered by insurers — in certain circumstances, such as emergency care and non-elective in-network care (1, 2). As a result of this policy, it became the healthcare providers’ responsibility to negotiate with insurers (3). Third, the NSA introduced independent dispute resolutions (IDRs) to address cost disputes between providers and insurers wherein an unaffiliated arbiter reviews claims and issues decisions (1). Finally, the policy emphasized transparency in medical billing by requiring providers and insurers to disclose prices and coverage details to patients in an accessible manner (1).
The implementation of the NSA has significant implications for patients and providers. For patients, the policy is generally considered to be a victory and a barrier against financial stress. Additionally, the transparency stipulated by the bill can empower patients to make informed healthcare decisions. Implementation, however, affects how much of an impact there is.
In the healthcare provider community, the No Surprises Act has been met with criticism and even legal challenges. Several elements of the policy, including the change in out-of-network cost calculation and the IDR process, have been disputed by multiple agencies, including the American Medical Association, the American College of Surgeons, and several state physician associations (7, 8). Opponents of the bill argued that the mechanism for determining out-of-network costs was erroneous and resulted in insufficient pay for their services and that the IDR process held a bias in favor of insurers over providers (8). Several lawsuits were filed, including the recent Texas Medical Association v. United States Department of Health and Human Services case, in which a decision was released in August 2023 that suspended several IDR process operations (9). These legal challenges have put on hold the full implementation of the No Surprises Act in a few instances as the government and relevant medical societies debate and argue. It may be a while before NSA issues are all fully resolved.
References
1: 116th Congress. 2020. H.R. 3630: No Surprises Act. URL: https://www.congress.gov/bill/116th-congress/house-bill/3630.
2: Centers for Medicare and Medicaid Services. 2021. What you need to know about the Biden-Harris administration’s actions to prevent surprise billing. URL: https://www.cms.gov/newsroom/fact-sheets/what-you-need-know-about-biden-harris-administrations-actions-prevent-surprise-billing.
3: American Medical Association, 2023. Implementation of the No Surprises Act. https://www.ama-assn.org/delivering-care/patient-support-advocacy/implementation-no-surprises-act.
4: Pollitz, K. 2021. No Surprises Act implementation: what to expect in 2022. KFF. URL: https://www.kff.org/health-reform/issue-brief/no-surprises-act-implementation-what-to-expect-in-2022/.
5: Pollitz, K., Rae, M., Claxton, G., Cox, C. and Levitt, L. 2020. An examination of surprise medical bills and proposals to protect consumers from them. Peterson-KFF Health System Tracker. URL: https://www.healthsystemtracker.org/brief/an-examination-of-surprise-medical-bills-and-proposals-to-protect-consumers-from-them-3/.
6: Garmon, C. and Chartock, B. 2017. One in five inpatient emergency department cases may lead to surprise bills. Health Affairs, vol. 36(1). DOI: 10.1377/hlthaff.2016.0970.
7: Keith, K. 2022. The six provider lawsuits over the No Surprises Act: latest developments. Health Affairs. DOI: 10.1377/forefront.20220216.824139
8: Bauer, I. 2021. AAMC, others file amicus brief challenging IDR in No Surprises Act. Association of American Medical Colleges. URL: https://www.aamc.org/advocacy-policy/washington-highlights/aamc-others-file-amicus-brief-challenging-idr-no-surprises-act.
9: Henry, T. 2023. Court: No Surprises Act favors insurers, must be revamped. Association of American Medical Colleges. URL: https://www.ama-assn.org/delivering-care/patient-support-advocacy/court-no-surprises-act-final-rule-favors-insurers-must-be.
