A new law that took effect on January 1 protects patients with private insurance from surprise medical bills for services received in an emergency situation or when care at a facility covered by a patient’s health insurance plan is provided by an out-of-network clinician.
The No Surprises Act, which the US Congress passed in 2020 as part of legislation to fund the federal government for fiscal year 2021 and provide stimulus relief for the COVID-19 pandemic, applies to most surprise bills for emergency care and for nonemergency services received at in-network facilities.
According to a recent issue brief from the Kaiser Family Foundation, the federal government estimates that the act will apply to approximately 10 million out-of-network surprise medical bills a year.
About two-thirds of US adults have expressed worry about being able to afford unexpected medical bills, according to the Kaiser Family Foundation. For privately insured patients, an estimated 1 in 5 emergency claims and 1 in 6 in-network hospitalizations include at least 1 surprise bill for out-of-network services.
Some patients hospitalized for nonemergency care, such as elective surgery, have faced surprise bills from out-of-network clinicians that they did not choose (such as anesthesiologists, radiologists, or others). In such situations, the patient’s health plan may deny claims for out-of-network services or require a higher level of cost sharing from the patient.
Other surprise bills involve balance billing, when out-of-network clinicians, hospitals, and others who have not contracted to accept discounted payment rates from the patient’s health plan hold the patient responsible for the difference between the full undiscounted charge and the amount the health plan recognizes as reasonable.
Studies over the past decade found that surprise medical bills received by privately insured patients after emergency department visits or following elective surgeries or childbirth at in-network hospitals averaged more than $1200 for anesthesia, $2600 for surgical assistants, and $750 for childbirth, according to a November 2021 report from the Department of Health and Human Services’ Office of the Assistant Secretary for Planning and Evaluation. In addition, a March 2019 analysis from the US Government Accountability Office found that 69% of approximately 20 700 air ambulance transports of privately insured patients were out of network in 2017, at a median price of about $36 400 for helicopter transport and $40 600 for plane transport.
Now, under the No Surprises Act, clinicians and health care facilities are barred from issuing surprise medical bills to patients with private insurance (costs that exceed a plan’s in-network cost sharing, such as copays and deductibles) for emergency care in a hospital emergency department, a free-standing emergency facility, or an urgent care center that is licensed to provide emergency care. Emergency care includes providing screening and stabilizing treatment to individuals who believe they are experiencing a medical emergency or active labor.
Additional out-of-network charges are also not permitted for emergency and nonemergency air ambulance services. However, ground ambulance services are not covered by the new federal law, although some states prohibit out-of-network medical bills from ground ambulance companies.
The No Surprises Act also covers nonemergency services provided by out-of-network clinicians at in-network hospitals and other facilities, such as hospital outpatient departments and ambulatory surgery centers. Those offering such care—which includes imaging and laboratory services, treatment, and a range of other services—may not send the patient a surprise bill.
With the patient no longer responsible for the surprise bill—the difference between in-network rates and the undiscounted charges for out-of-network care—it is up to the insurers and the out-of-network clinicians and other service providers to come to an agreement. They can negotiate privately over the amount to be paid or request a baseball-style arbitration process, in which both parties make an offer and an arbitrator selects one, with the loser paying the arbitration cost of $200 to $500. However, some groups, including the American Hospital Association and the American Medical Association, are suing the federal government over the dispute resolution process outlined in the act, alleging that it unfairly favors health insurers.
In some circumstances, such as a patient wanting treatment from a specific out-of-network physician, the patient may give prior written consent to waive his or her rights under the No Surprises Act and agree to be billed an additional cost for out-of-network care. In such cases, the physician is required to describe the out-of-network services to be provided and a good faith estimate of the costs the patient may be charged.
However, clinicians or health care facilities cannot pressure patients to waive their rights as a condition for care, and waivers are not permitted for emergency services or for certain nonemergency services. The federal government and some consumer advocacy groups caution that patients should be aware that giving written consent to be billed for out-of-network care means they are giving up their protections under the new law and that they consequently may owe the full amount billed for any items and services received—costs that their health plan might not count toward their deductible and out-of-pocket limit.
Under the new law, consumers have the right to appeal charges by the insurer that they believe were incorrectly denied or that incorrectly applied out-of-network costs. In addition, consumers who signed the consent form and agreed to pay an out-of-network physician can dispute a final bill that exceeds the good faith estimate by more than $400.
The No Surprises Act also established a national consumer complaints system for surprise medical bills. Patients who receive a surprise medical bill after January 1, 2022, are advised to first contact both the care provider and their insurance provider immediately; if that does not resolve the issue, the patient can file a complaint within 120 days, either online at https://www.cms.gov/nosurprises or by calling a toll-free “No Surprises Help Desk” at 1-800-985-3059.
Published: January 11, 2022. doi:10.1001/jamahealthforum.2022.0019
Open Access: This is an open access article distributed under the terms of the CC-BY License. © 2022 Stephenson J. JAMA Health Forum.
Corresponding Author: Joan Stephenson, PhD, Consulting Editor, JAMA Health Forum (Joan.Stephenson@jamanetwork.org).
Conflict of Interest Disclosures: None reported.