What’s Ahead with the “No Surprises Act"

The No Surprises Act—signed into law in December 2020 and taking effect in January 2022—was intended to address the persistent problem of balance billing patients for the costs of services of facilities and providers who are not in their health plan network, often with no prior notice. With proposed regulations yet to be released there could be a few surprises yet for healthcare providers and payors.

A “surprise” bill is an unexpected balance bill after a patient receives services from an out-of-network provider at an in-network facility. For example, a patient might have surgery at a hospital that participates in his or her health plan’s network while the anesthesiologist and pathologist who provide services as part of the surgery do not. In this situation, patients are often surprised to learn that all of the services are not in-network, and they are stunned to discover that they are expected to pay the difference between the providers’ fees and their health plan’s out-of-network rates.

Surprise billing also creates problems for payors and providers. Payors are often required to spend additional time helping unhappy employees or enrollees understand why the services they received were not covered under their health plans. For providers, the disparities in payment rates may lead to uncollected fees and patient dissatisfaction. In response, multiple states have passed legislation aimed at addressing this practice. The Act is the first comprehensive effort at the federal level, and it affects health plans, hospitals, physicians and air ambulance transportation companies.

The Act requires federal agencies including the Department of Health and Human Services and the Department of Labor to publish regulations and further requires some of these regulations to be published by July 1, 2021. Although the full scope of the regulatory scheme will not be known until final regulations are published, the Act itself makes it clear that healthcare providers, insurers and self-insured health plan sponsors should be ready to address budgetary, operational and administrative changes in the near future.

A longer, detailed assessment of the No Surprises Act is available here.

Waller will continue to monitor activities related to the regulations and rollout of the Act. Among other things, interested parties will have an opportunity to submit comments to the proposed regulations following the publication of the Notice of Proposed Rule Making.