What is the No Surprises Act (NSA)?
By: Olivia Blessing
The No Surprises Act (NSA) is a federal law in the United States that went into effect on January 1, 2022. Enacted as part of the Consolidated Appropriations Act, the NSA is designed to protect patients from unexpected medical bills occurring in emergency situations or when they receive care from out-of-network providers at the facilities of in-network providers. This type of billing is commonly referred to as “surprise billing.” The Act prohibits out-of-network providers from directly billing patients for certain services and instead requires them to seek payment from the patient’s health plan. If a patient is uninsured or opts for self-pay for a service, the NSA’s protections often provide the opportunity to get a good faith estimate of the cost of care up front.
The Difference Between In-Network and Out-of-Network Providers
In-network providers and out-of-network providers are differentiated by having a contract with a patient’s health insurance plan. In-network providers have contracts with the patient’s plan that have set rates for services, and patients typically pay lower out-of-pocket costs such as copayments, coinsurance, and deductibles. Out-of-network providers do not have contracts with the patient’s plan and can charge higher prices. In this situation, balance billing often arises, which refers to when a provider bills a patient for the difference between the provider’s charge and the amount covered by insurance.
Before the NSA, patients often unknowingly received care from out-of-network providers despite going to in-network facilities. For example, a patient could have surgery at an in-network hospital but later receive a large out-of-network bill from the anesthesiologist or radiologist who was not part of the insurance network. The NSA eliminates this problem in most emergency and certain non-emergency situations by ensuring patients are only responsible for in-network cost-sharing, even if some providers involved in their care are out-of-network.
When Does the NSA Apply?
The NSA applies in specific healthcare situations to protect patients from unexpected medical bills. More specifically, the NSA applies when:
- Emergency services are received, regardless of whether the facility or provider is in-network
- Non-emergency services are received at an in-network hospital or ambulatory surgery center with some of the providers involved being out-of-network (Ex: anesthesiologists, radiologists, etc.).
- Air ambulance services are received from an out-of-network provider
The Act also applies to health insurers, health maintenance organizations, and healthcare providers. It requires compliance with its provisions, including cost-sharing protections and billing practices. It mandates that a patient’s cost-sharing responsibilities for out-of-network services be equivalent to those for in-network services and that these amounts count toward in-network deductibles and out-of-pocket limits. Additionally, the Act requires good faith estimates for uninsured patients or those not using insurance. Certain healthcare programs, such as Medicare, Medicaid, and VA health care, are excluded from the Act as they have their own protections against surprise billing.
Requirements for Providers and Insurers
First, providers must give uninsured or self-paying patients a good faith estimate of expected charges before delivering the services. Second, patients must be informed and consent to receiving out-of-network care in certain situations. These situations involve non-emergency services being provided by an out-of-network provider at in in-network facility, but only when the provider is not an ancillary provider and wants to bill the patient more than the in-network cost-share. If valid consent is not received in these situations, the provider must comply with in-network cost-sharing rules and cannot balance bill the patient. Third, a federal Independent Dispute Resolution (IDR) process is available for providers and insurers to resolve payment disputes. The process provides dispute resolution options for uninsured and self-pay individuals when they receive a medical bill that substantially exceeds the good faith estimate they get from the provider.
To ensure compliance, the Act includes oversight mechanisms such as audits and enforcement by federal and state agencies. Health plans are required to report data on how often they use the Independent Dispute Resolution (IDR) process and whether payment determinations exceed the qualifying payment amount (QPA), a key benchmark used in determining fair reimbursement. Providers and insurers that fail to comply with NSA requirements may face civil monetary penalties.
There are a few instances that are notably not covered by the NSA. First, when a patient voluntarily chooses to receive non-emergency care from an out-of-network provider at an out-of-network facility, the NSA does not apply. Second, the NSA does not apply to ground ambulance services. Likewise, NSA does not apply when a patient is covered by short-term limited duration insurance, excepted benefits, or healthcare sharing ministries. Lastly, receiving international care or from a veteran or military facility is not covered by the NSA.
Conclusion
The NSA constituted a major shift in the healthcare billing landscape and placed the burden of payment disputes on insurers and providers rather than patients. Before the NSA, millions of Americans received surprise bills even after seeking care at what they believed were in-network facilities. By establishing clear limits on patient financial responsibility and instituting a dispute resolution mechanism, the Act seeks to create greater predictability and transparency in medical billing.
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