LUGPA Policy Update: No Surprises Act

August 10, 2023

Managing the increasing cost of healthcare and lowering the burden of healthcare debt on families has been a significant focus of Congress and state legislatures over the last few years. Fighting financial toxicity, or the negative impact that medical expenses can have on patients’ quality of life, will become increasingly important as the American population ages and more patients need healthcare.

One of the most important reforms protecting consumers against rising healthcare costs is the No Surprises Act (NSA). First going into effect on January 1, 2022, the No Surprises Act created several new federal prohibitions against certain surprise medical bills. Surprise medical bills happen when a patient receives an unexpectedly high medical bill after receiving emergency care treatment from an out-of-network provider or facility or an out-of-network provider at an in-network facility.

The NSA explicitly bans what is known as balance billing, which occurs when a provider bills a patient for the difference between the provider’s charge and the allowed amount. Balance billing is often a surprise for patients who are not always aware that the emergency services they are receiving are considered out-of-network care.

The new law covers three main circumstances of care: when patients receive emergency care at an out-of-network facility or from an out-of-network provider, a patient receives emergency air-ambulance transportation, or a patient receives elective nonemergency care at an in-network facility but is inadvertently treated by an out-of-network health care provider.

The NSA also creates a new independent dispute resolution process for payment disputes between health plans and providers and resolution mechanisms for the uninsured and self-pay individuals.

The Centers for Medicare & Medicaid Services (CMS) has outlined seven new requirements for healthcare providers and facilities under the No Surprises Act, which include:

Providers may not balance bill for out-of-network emergency services
Providers may not balance bill for non-emergency services performed at certain participating healthcare facilities without consent
Providers may not balance bill for air ambulance services by nonparticipating providers
Providers must disclose patient protections against balance billing
Providers must provide a good faith estimate of services to the self-pay patients
Providers must work to improve provider directory information by providing timely updates to health plans
Providers must ensure continuity of care when a provider’s network status changes

States also play a significant role in combatting surprise medical bills; before the passage of the NSA, 33 states enacted laws to protect consumers in fully insured health plans from balance billing, according to the Commonwealth Fund. The NSA improves and expands on many of these state laws, but in instances where the state laws are more robust than the NSA, the state laws remain in force.

The NSA also allows states to determine how payment disputes between insurers and providers are resolved. The current system under the Act resolves through negotiation and an independent dispute resolution (IDR) or arbitration process when the talks fail. One point to note is that states with their own dispute resolution mechanism do not need to use the federal approach; this is the case in 22 states.

For more information on the IDR process, visit CMS’s informational page here: https://www.cms.gov/files/document/federal-independent-dispute-resolution-guidance-disputing-parties.pdf.

States also play a crucial role in enforcing the NSA, with the law designed to give states the primary function of enforcing the new rules. Since the passage of the NSA, eight states have enacted new legislation that improves their state regulations regarding balance billing, including efforts to align state laws to meet or exceed NSA protections, consolidate NSA’s enforcement authority in the state’s department of insurance, or enacted laws which change how payments for out-of-network services are regulated.

The Commonwealth Fund has developed a map outlining how each state approaches No Surprises Act enforcement; it is available here: https://www.commonwealthfund.org/publications/maps-and-interactives/2022/feb/map-no-surprises-act.

Since the No Surprises Act’s passage, patients have made hundreds of thousands of claims. According to an April 2023 report from CMS, between April 15, 2022, and March 31, 2023, disputing parties initiated 334,828 disputes through the federal IDR portal, with initiating parties being the prevailing party in approximately 71 percent of the disputes.

LUGPA believes it is essential for physicians to understand how the No Surprises Act will affect them, as it imposes limitations and grants certain rights to physicians caring for patients in these situations. LUGPA and CMS have developed resources to assist providers and consumers in navigating the new NSA laws.

LUGPA’s No Surprises Act Information and Resource Hub is available here: https://www.lugpa.org/index.php?option=com_content&view=article&id=310:no-surprises-act-hub&catid=28:latest-news

In June, CMS updated its online information on the No Surprises Act with several new user-friendly web pages. You can view the latest information online here: https://www.cms.gov/medical-bill-rights. A Spanish-language version of the site is available here: https://www.cms.gov/derechos-facturas-medicas.

LUGPA’s Health Policy & Advocacy team will continue to follow the No Surprises Act as new developments arise.