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No Surprises Act: A Brief Overview for Providers and Patients

The “No Surprises Act,” which took effect on Jan. 1, 2022, creates federal protections intended to prevent surprise billing on a national level. The act’s primary focus is to ensure patients do not receive unexpected bills from out-of-network providers they did not choose.

The legislation prohibits payers and providers from billing a patient more than the in-network cost-sharing amounts for:

  • emergency treatment from an out-of-network facility or provider
  • non-emergency care from an out-of-network provider when the patient cannot choose an in-network provider

“Surprise medical bills pose financial burdens on consumers when health plans deny out-of-network claims or apply higher out-of-network cost-sharing,” said the Kaiser Family Foundation in a recent issue brief.

Unless specific conditions are met, this also includes post-stabilization services. According to the Kaiser Family Foundation, post-stabilization care is considered emergency care until a physician determines the patient—with their consent—can travel safely to another in-network facility using non-medical transport.

Payment, Denials, and Disputes

Payers are required to send initial payment or notice of denial less than 30 days after providers submit a claim. After this time, payers and providers may negotiate the claim within an additional 30-day period, leading to an independent dispute resolution (IDR) if it isn’t resolved.

Payers or providers can begin the IDR process within four business days of the negotiation period closing. Once the dispute is filed, the other party has three business days to agree or object. They must then mutually select an IDR entity within three days, or an entity will be assigned.

When it is officially begun, each side submits their settlement offer and any additional information requested, and the IDR entity selects one of the proposed offers as the correct payment. The chosen offer should be closest to the Qualifying Patient Amount (QPA)—the average contracted rate for a service in a specific geographic area.

Patient Notice and Consent

One exception to the No Surprises Act allows patients to waive their rights to protection voluntarily. If they choose to see an out-of-network provider, they must receive notice of their financial liability at least 72 hours before the service is provided. The notice must:

  • Indicate the facility or provider is out of network
  • State that consent to waive rights is optional
  • Include a good faith estimate of the amount they may be charged
  • Include a list of in-network providers who can administer the same service

Patients who do not waive their rights can file complaints if they believe the QPA has been violated. These oral or written complaints can be filed through a specially created process and will see a response within 60 days.

Help for the Uninsured

The No Surprises Act offers protection to the uninsured as well. When an uninsured patient schedules a service or makes a request, providers are required to give them a “good faith estimate” of expected charges. The estimate should include a list of each item or service, grouped by provider or facility, with specific service details and the amount charged.

If uninsured patients are billed at least $400 more than the good faith estimate, they can submit a dispute and initiate the IDR process with the Secretary of Health and Human Services. HHS will assign the case to a selected dispute resolution entity, which reviews the information and determines if the charge is justified or should be reduced.

Impact on Providers

While the No Surprises Act is undoubtedly beneficial for patients, it will create a more significant burden for healthcare providers and facilities. With dwindling resources due to the industry-wide staffing shortages amidst the pandemic, the challenges placed on providers become exponential.

One way to alleviate this strain is by working alongside a trusted revenue cycle management partner who can handle complex accounts so you can focus on the new challenges presented by the No Surprises Act.

At MedData, we partner with hospitals and health systems to provide easy-to-implement A/R solutions that increase cash, reduce the cost to collect, and free up your valuable internal resources.

Find out how MedData can help your revenue cycle team meet the industry’s toughest challenges.

Note: This article is intended for informational purposes; it only contains a summary of the No Surprises Act and should not be considered legal counsel or advice.