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How the No Surprises Act Protects You

The No Surprises Act is federal legislation which took effect in January 2022. It was passed to address some rather egregious billing practices in the field. As we have discussed many times, when an individual is out-of-network, their insurance might provide very little protection. The insurer can reimburse according to its fee schedule, but the provider of the service has no limit on what they charge and the patient can be left with the difference which often resulted in a large, surprise medical bill.

The No Surprises Act was passed to recognize the essential difference in choosing an out-of-network physician or provider versus being innocently ensnared by a given situation outside of one’s control. The law applies to individual and group coverage and also provides some protection to the uninsured as discussed below. The legislation doesn’t apply to those on Medicare because the vast majority of physicians and other providers have a relationship with Medicare which limits their ability to balance bill patients.

Patients are routinely reminded to go to the “nearest facility” in an emergency and it is totally impractical in an emergency situation to verify if the nearest hospital is in-network. Even before the No Surprises Act, plans with no out-of-network benefit would process and pay on an emergency claim for an out-of-network provider, but it was not uncommon for the patient to receive a substantial bill for the difference in what the provider billed and what the insurance paid. The No Surprises Act limits the patient’s liability in such a situation to the plan’s in-network deductibles and copayment or coinsurance amounts. And the out-of-network facility or physician should bill the patient accordingly.

Another type of situation creating surprise medical bills resulted from various medical groups. Most commonly, anesthesiology, neonatology and emergency room physicians, chose to remain out-of-network to be able to balance bill patients when working in an in-network facility. Providers did this to preserve their ability to charge higher rates which is somewhat understandable but because the patient had no option to remain in-network, was a questionable practice. Further, this legislation would likely not have passed if providers had consistently maintained charges at a reasonable level.

As a result, the situation of choosing an in-network hospital and in-network surgeon but owing a large balance bill to an out-of-network anesthesiologist because there is no in-network anesthesia option, should no longer occur. Since this legislation has been in effect for well over a year now without much fanfare, we interpret that as a sign of a high degree of compliance with the legislation. Also, many states had state legislation in effect which preceded the federal legislation that already provided protection to those covered by fully insured products.

This legislation also helps the uninsured. Providers are obligated to extend good faith estimates of medical bills and notify patients of their billing protections and whom to contact in case of a dispute. There is also a mediation process should a patient dispute a charge.

The No Surprises Act applies to air ambulance providers but not ground ambulance providers, at least for now. On the face of it, this seems questionable because so often ground ambulance charges are in dispute. However, Congress deliberately avoided including ground ambulance services because they are provided in so many different ways, through private for-profit companies, private nonprofits, and local government. Depending on where you live, ground ambulance charges are routinely disputed and in other locales, claims aren’t even submitted to insurance for those services, even for those with coverage.

In summary, the No Surprises Act is an important protection for consumers and there appears to be a high level of compliance with its requirements.