No Surprises Act

The No Surprises Act is a federal statute enacted in December 2020 that limits what an out-of-network health care provider may charge a patient in situations where the patient had no realistic opportunity to choose an in-network one. Its short title is set out in its own first section: "This title may be cited as the 'No Surprises Act'." It is title I of division BB of the Consolidated Appropriations Act, 2021, Public Law 116-260, and the short title is carried as a note to 42 U.S.C. 201. Its substantive requirements apply to plan years, and in the individual market policy years, beginning on or after January 1, 2022.

It is worth being precise about the size of the thing, because "the surprise billing law" undersells it and also oversells it. The title runs to eighteen sections, and only three of them, sections 102, 104 and 105, are about balance billing. The rest establish an independent dispute resolution process between plans and providers, require transparency about in-network and out-of-network deductibles and limits, prohibit provider discrimination, extend external review, require an advance cost estimate, create a good faith estimate and dispute process for uninsured patients, require continuity of care, mandate a price comparison tool, address state all-payer claims databases, impose provider directory accuracy requirements, and set up an advisory committee on ground ambulance billing. Running the other way, the Act does not abolish balance billing, which remains lawful in several situations the balance billing page maps.

The three protected situations, and the arithmetic the protection produces. A nonparticipating emergency facility or provider may not bill you more than in-network cost sharing for emergency services at a hospital emergency department or an independent freestanding emergency department. A nonparticipating provider may not do so for non-emergency services delivered at a participating hospital, hospital outpatient department, critical access hospital or ambulatory surgical center, unless the notice and consent requirements below are met. And the same protection extends to air ambulance transport. Inside those situations three rules operate together, and the second and third are the ones people miss. Under 45 C.F.R. 149.110(b)(3)(iii), your cost sharing is calculated "as if the total amount that would have been charged for the services by such participating provider … were equal to the recognized amount". Under (b)(3)(v), those payments must count toward "any in-network deductible or in-network out-of-pocket maximums", in the same manner as if the care had been in network. And under (b)(3)(iv)(A) the plan has 30 calendar days from the transmission of the bill to send the provider an initial payment or a notice of denial. The remaining dispute is between the plan and the provider, through negotiation and then the independent dispute resolution process, and the patient is out of it.

The notice-and-consent exception, and the list where it is unavailable. For scheduled non-emergency care at a participating facility, a nonparticipating provider may restore the right to balance bill by giving written notice and obtaining consent under 45 C.F.R. 149.420(c). The conditions are demanding: the notice must be physically separate from other documents, must state that the provider is nonparticipating, must include a good faith estimate of the charge, must say that consent is optional and that an in-network provider may be sought instead, and must be provided at least 72 hours before the service where the appointment was made at least that far ahead, or on the day the appointment is made where it was made inside 72 hours, and in no case later than three hours before. The consent must be voluntary and must acknowledge, among other things, that the payment "might not accrue toward meeting any limitation that the plan or coverage places on cost sharing, including … an in-network deductible or out-of-pocket maximum."

Paragraph (b) is the part that cannot be waived. The notice and consent criteria "do not apply" at all, and the prohibition always binds, for: items and services related to emergency medicine, anesthesiology, pathology, radiology and neonatology, whether provided by a physician or a non-physician practitioner; items and services provided by assistant surgeons, hospitalists and intensivists; diagnostic services including radiology and laboratory services; and items and services provided by a nonparticipating provider where no participating provider can furnish them at that facility. A second paragraph adds items or services furnished as a result of unforeseen, urgent medical needs arising at the time. In other words, the specialties that generated the surprise-billing problem in the first place are the specialties that cannot contract out of the fix.

If you have no insurance, a different half of the Act applies. A provider must give an uninsured or self-pay patient a good faith estimate of expected charges. Where the total billed charges come in "substantially in excess" of that estimate, which 45 C.F.R. 149.620(a)(2)(ii) defines as at least $400 more than the total expected charges listed for that provider or facility, the patient may initiate patient-provider dispute resolution. The initiation notice must be postmarked within 120 calendar days of receiving the initial bill, and an administrative fee applies. A right stated without its deadline is a right that can be lost, so the two numbers belong together.

The advance explanation of benefits Congress required, and its status. Section 111 added subsection (f) to section 2799A-1 of the Public Health Service Act, codified at 42 U.S.C. 300gg-111(f), requiring plans, "[f]or plan years beginning on or after January 1, 2022", to send an enrollee an advance notification after a provider notifies the plan of scheduled care, within one business day, or three business days where the care was scheduled at least ten business days ahead. The Departments deferred enforcement before it began. Their guidance, in the frequently asked questions on Affordable Care Act implementation, answers the question whether regulations would be issued before the effective date with "No", citing the technical infrastructure needed, and states: "Until that time, the Departments will defer enforcement of the requirement that plans and issuers must provide an Advanced Explanation of Benefits." A request for information followed in September 2022. A Federal Register search for the term when this page was last reviewed found no proposed or final rule implementing it. So the statutory requirement exists, enforcement is deferred pending rulemaking, and the rulemaking has not arrived.

The gap Congress left, stated plainly. Section 105 is headed "Ending surprise air ambulance bills". Ground ambulance received section 117, an advisory committee established to review options "to improve the disclosure of charges and fees for ground ambulance services, better inform consumers of insurance options for such services, and protect consumers from balance billing". A committee is not a prohibition. Some states have legislated for ground transport, and state insurance law generally cannot reach a self-funded employer plan, so whether a given patient is protected depends both on where they live and on how their coverage is structured.

1. Ask whether the situation is protected. Emergency services, an out-of-network provider at an in-network facility, or air ambulance.

2. If it is, your cost sharing is calculated as if the recognized amount were the in-network charge, and it must count toward the in-network deductible and out-of-pocket maximum.

3. The provider may not bill you the rest. The plan and the provider settle it between them, by negotiation and then through independent dispute resolution.

4. Check for a notice and consent form if the care was scheduled and not emergency. If one was signed, and the service is not on the protected list, the balance bill may be lawful.

5. If you were uninsured or self-paying, compare the bill against the good faith estimate and note the $400 and 120-day tests.

6. Complain if the bill is prohibited. Both the plan-side and the provider-side rules have federal complaints processes.

A hypothetical, showing the protection and the gap in one night. Kwame is taken to the nearest emergency department, which is not in his plan's network. The facility bills $18,400. His plan determines a recognized amount of $5,600, and his in-network emergency coinsurance is 20%.

He owes 20% × $5,600 = $1,120, calculated as though the recognized amount were the in-network charge, and that $1,120 counts toward his in-network deductible and in-network out-of-pocket maximum. The $18,400 − $5,600 = $12,800 difference may not be billed to him at all. The facility's argument about the recognized amount is with the plan.

The same night, the ground ambulance that took him bills $1,900. His plan allows $650 and pays 80% of it, $520, leaving him $130 of cost sharing. The ambulance company then bills him the $1,900 − $650 = $1,250 difference, and unless his state has legislated and his coverage is the kind state law can reach, that bill is lawful. Same night, same lack of choice, two different answers, because of what Congress covered in section 105 and what it sent to a committee in section 117.

What it does well

• It removes the patient from a dispute they cannot influence, by capping their exposure at in-network cost sharing and sending the rest to arbitration between the plan and the provider.
• The cost sharing counts toward in-network accumulators, so the protection is not undone by a separate out-of-network deductible.
• The specialties that produced the problem cannot contract out of the fix, because consent is unavailable for them by regulation.
• It gives uninsured and self-paying patients a written estimate and a dispute route with a stated threshold and deadline.
• The directory-accuracy and continuity-of-care provisions address failures that have nothing to do with billing at the moment of care.

Where it falls short

• Ground ambulance is outside it, and a patient has no more say in which ambulance arrives than in which emergency department it goes to.
• The notice-and-consent exception exists, and a form signed in a waiting room three hours before a procedure can restore the bill for services not on the protected list.
• It does not reach services the plan does not cover at all, or care paid for without insurance beyond the estimate process.
• The advance explanation of benefits Congress required has been unenforced since before it began, pending rulemaking that has not arrived.
• Enforcement still depends on the patient recognizing a prohibited bill, since nothing stops one being sent.