No Surprises Act: What You Need to Know About Surprise Medical Bills

A new hospital price transparency law known as the No Surprises Act took effect on January 1, 2022. The act aims to eliminate “surprise medical bills” that insured consumers receive after undergoing care from out-of-network hospitals, doctors, or other providers they did not choose.

The law, which Congress passed in late 2020, protects consumers by limiting high out-of-pocket costs and covering emergency services without prior authorization. It also requires providers to provide “good faith estimates” (GFE) for certain patients.

What Is Surprise Billing?

“Surprise billing” refers to large, unexpected bills patients receive from out-of-network providers. It is also sometimes called “balance billing.” Balance billing happens when an out-of-network provider bills a patient for the balance not covered by the patient’s insurance plan.

image of a lightbulb with a checkmark inside

What Does the No Surprises Act Do?

If a patient has insurance, the No Surprises Act bans surprise bills for out-of-network emergency services and out-of-network supplemental care (like anesthesiology or radiology) at in-network facilities. The act prohibits out-of-network cost-sharing, which means patients won’t pay more than in-network cost-sharing for out-of-network care.

The act also requires providers to give uninsured and self-pay patients a “good faith estimate” on how much their care will cost.

Why Is the No Surprises Act Important?​

Surprise medical bills create financial burdens on consumers when health plans deny out-of-network claims or apply higher out-of-network cost-sharing. Banning surprise medical bills means patients are more protected from receiving astronomical bills after a procedure. The law also helps make sure patients understand billing expectations before a procedure.

Before the No Surprises Act, a patient’s insurance may not cover the entire cost from an out-of-network provider. The patient ends up with a higher bill than if they had seen an in-network provider. 

Unfortunately, in most emergency scenarios, patients don’t choose whether they can see an out-of-network or in-network provider. Even if the hospital is in-network, the provider they see may be out-of-network. According to a 2017 Peterson-KFF study, an average of 18% of emergency visits result in at least one out-of-network charge, but the rate varies by state.

no surprise act

Who Does the No Surprises Act Affect?​

The No Surprises Act applies to: 

  • Providers delivering emergency care as well as non-emergency care
  • Providers that are out-of-network 
  • Providers that are in-network with the payer they are billing
  • All out-of-network emergency health facilities
  • Referrals from an in-network to an out-of-network physician

But what about services for which the patient typically can’t choose a provider? ​

The law also applies to airlifting by air ambulance, whether it’s done as an emergency or not. It even applies to post-stabilization medical care provided by an out-of-network facility – pending transfer to a facility of choice. These services are primarily covered as part of a “no exception group,” which means insurers must treat these services as in-network.

The no exception group includes: 

  • Emergency medicine
  • Anesthesiology 
  • Radiology
  • Neonatology
  • Pathology
  • Diagnostic testing 
  • Other services provided by hospitalists, intensivists, and assistant surgeons. 

What the No Surprises Act Means to Your Medical Practice and Billing Team​

  • Talk to your patients about costs before you provide treatment or services. Let them know to the best of your ability what fees you will charge and how much insurance will pay. This is made easy by using Gentem’s Real-Time Eligibility (RTE) verification and Sendable Patient Estimates. Patients receive an estimate via HIPAA-compliant text message or email before you provide care. Patients can view estimates and pay balances without a login or portal.
example of real time estimate
  • Make sure your patients understand their options. You should provide an easy-to-understand document telling patients that out-of-network care could be more expensive. This notice should also give them options to avoid surprise bills. 
  • Have a patient communication plan in place. Make sure your staff understands the process to estimate a procedure. Important things for your staff to know are: 
    • Network status (in- and out-of-network)
    • Expected procedure / CPT code
    • The patient’s specific plan information like deductible, copayments and coinsurance
    • The allowable per the payer contract
  • Communicate with other departments in your practice about your estimate process and the No Surprises Act. Train your insurance verification teams, IT and business operations. Make sure they understand the policy-specific information they need to collect to keep patients informed (i.e., plan deductible, deductible met, deductible remaining). 

Are There Penalties for Providers Who Don’t Comply?

If a provider bills a patient for more than the in-network cost-sharing amount, they could face a penalty of up to $10,000 for each violation.

What About Payment Disputes?

The No Surprises Act allows for some payment disputes. Under the law, uninsured or self-pay patients can dispute a bill if it’s $400 or more over the provider’s good faith estimate.

According to a 2018 Peterson-KFF poll, 38% of respondents were “very worried” about their ability to pay unexpected medical bills — more than any other potential expense on the survey. 

Improve the Patient Experience with AI-Powered Patient Estimates

Get instant and reliable benefit verification for all of your insurance payers in one place — whether in- or out-of-network — so you can focus on your patient, not their coverage or claim issues. Gentem helps you calculate out-of-pocket expenses and accurate estimates using the patient’s eligibility information.

Learn more about real-time eligibility, analytics and other features of our medical billing platform.

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