The No Surprises Act is a federal law intended to prevent surprise medical bills by requiring health insurers and hospitals to have contracts with each other for covered services. According to the Act, patients cannot be charged for out-of-network emergency care, post-stabilization care, or scheduled out-of-network services unless they have consented to them. The goal is for patients to know in advance if they’ll be treated by an out-of-network provider and what their costs will be before they consent to the services.
No Surprises Act in a Nutshell
The No Surprises Act was signed in 2020 and came into effect on January 1, 2022.
The Act prohibits:
- Surprise bills for emergency care provided in an in-network hospital or free-standing emergency department (including air ambulance charges) until the patient is stable and can consent to the charges.
- Balance billing for scheduled non-emergency, out-of-network services provided at an in-network facility – such as by anesthesiologists or pathologists – unless the patient was notified of the out-of-network status and given the opportunity to consent before treatment began.
- High deductibles charged by insurance companies for out-of-network care.
The No Surprises Act applies to all types of insurance plans, including individual health insurance plans, employer-sponsored group health insurance plans, and government programs. Patients with federal insurance plans from Medicare, Medicaid, Indian Health Services, VA health care, or TRICARE aren’t covered under the Act since their plans are already protected from unexpected medical expenses.
What Constitutes Surprise Medical Bills?
Let’s say that a person suddenly has a heart attack and goes to an in-network hospital. But one of the doctors isn’t in the person’s network, so they may charge out-of-network rates even though the hospital employs them. That’s known as balance billing.
Surprise billing or balance billing often happens in two cases:
- When you’re in for emergency care, you don’t have control over how or who is involved in your treatment and can get billed for services at an out-of-network facility.
- Or, there can be instances when you visit an in-network hospital but get treated by an out-of-network provider and get billed for it.
So typically, a surprise billing happens when the patient is billed for the difference between what their insurer pays and what they charge.
The No Surprises Act prohibits balance billing for emergency care, whether it was an in-network or out-of-network hospital, air ambulance company, or emergency department. Instead, the medical insurance provider should cover the bill for emergency services as they do for in-network care.
Similarly, the No Surprises Act prohibits balance billing for non-emergency care delivered by out-of-network providers at an in-network facility — unless the person has given written consent. This includes services rendered for anesthesia, radiology, laboratory, pathology, etc.
How Does the No Surprises Act Work?
Usually, doctors who work at in-network hospitals charge an independent bill that may or may not fall under the same health plans. So previously, such out-of-network doctors and other service providers billed a high, undiscounted fee to patients, which the patient would submit to the insurance provider as an out-of-network bill to get as much money back as they could.
However, with the No Surprises Act in effect, hospitals and emergency departments can’t charge a surprise fee without giving prior notice to the patient. There are certain differences in how the No Surprises Act should be followed for insured and uninsured patients.
For Insured Patients
In case of emergency care at an out-of-network facility, the patient will be treated until they’re stabilized and can be transferred to another facility. The hospital will raise the bill based on the cost-sharing amount to the health plan provider. The hospital can’t raise a balance bill to the patient for emergency care.
Now, the health plan provider will pay the hospital within 30 days. This amount will be subjective based on the provider’s cost of care estimate. If the hospital or the physician disagrees with the amount, they have 30 days for open negotiation. If they cannot come to an agreement, they can initiate independent dispute resolution (IDR) with a third party deciding a fair amount.
In the case of non-emergency care at an out-of-network facility, the patient can only be charged the usual in-network costs, like coinsurance, copayments, or deductibles. Or, the patient should be informed before the services about the total cost of the service.
Some healthcare facilities may ask patients to sign a notice and consent form to give up their rights and pay a higher rate for out-of-network services for non-emergency care. In some cases of emergency care, the patient may be asked to sign the notice and consent form after they’re stabilized enough and before the facility provides any post-stabilization services. But in both cases, the patient isn’t obliged to do so.
For Uninsured Patients
In the case of non-emergency care, the health plan provider should provide a good faith estimate to the uninsured patient for scheduled services.
A good faith estimate should provide a written itemized estimate of the services that may be needed by the patient, including the physician’s fee, medical tests, and other fees. To get a good faith estimate, the patient should schedule the service at least three days in advance, and the facility should get back in writing at least a day before the service. If the facility billed $400 over the good faith estimate, the patient could dispute the bill.
In the case of non-emergency care, however, the facility isn’t obliged to provide a good-faith estimate. The patient can always challenge the bill if the facility hasn’t followed the rules of the No Surprises Act.
In Conclusion
Already, the No Surprises Act has been making ripples in the healthcare sector, and many patients have been benefiting from it.
From healthcare providers and insurance companies to debt collection agencies, everyone involved in the medical billing process is obliged to keep in line with the Act — thereby prioritizing transparency and patient care over everything else. As such, it is doing much good in the healthcare sector and will likely continue for years to come.