Passed as part of the Consolidated Appropriations Act of 2021 (CAA), the No Surprises Act is a piece of legislation that is designed to limit or eliminate “surprise” medical costs charged to patients for out-of-network costs. Find out how this new bill will work, when it will go into effect, and much more.
What is the No Surprises Act?
The No Surprises Act is a piece of legislation that was passed as part of the Consolidated Appropriations Act of 2021 (CAA), a COVID-19 economic stimulus package that became law in December 2020. The law is designed to place restrictions on out-of-network healthcare charges that “surprise” individuals with unexpected bills. In general, the law applies to patients who were not informed beforehand that the services were not included in their plan’s network.
Surprise billing is one of the many hazards associated with the modern American healthcare system. According to data collected in 2018 and 2019 by the Kaiser Family Foundation (KFF), two-thirds of American adults are worried about being able to pay for medical bills while 20% of all insured adults received a surprise medical bill within the past two years.
How Does the No Surprises Act Work?
Once the No Surprises Act goes into effect on Jan. 1, 2022, patients will only be required to pay the in-network cost-sharing amount for medical services they receive. Per Proskauer Rose attorneys writing in The National Law Review, these costs “will be determined through a formula established by the HHS Secretary and will count toward the patient’s health plan deductible and out-of-pocket cost-sharing limits.”
Regarding patient protections, the No Surprises Act will:
Prevent surprise medical bills for emergency services and other services provided by out-of-network clinicians at in-network facilities
Prevent surprise medical bills for emergency services and other services provided by out-of-network clinicians at out-of-network facilities
Require patients to only pay for the in-network cost-sharing amount of services received
A separate article from Proskauer Rose, also published in The National Law Review, clarifies when these protections apply to patients with health plans. According to the analysis, “[i]n an emergency […], if the health plan (broadly defined) covers emergency services at all, it must provide coverage for such services at any facility or provider without prior approval and without any conditions not applicable to in-network providers.”
Yet there’s more to the No Surprises Act than these regulations. According to an evaluation of the law conducted by the American Hospital Association, the bill will also:
Permit providers and insurers to negotiate reimbursement for cost-sharing services, as well as resolve reimbursement disputes through an independent process
Enhance price transparency by requiring providers and health plans to help patients access relevant information related to healthcare costs
While the No Surprises Act will ban surprise billing on a federal level, many states have already implemented similar legislation to protect patients. Use this resource to review the states that protect against surprise billing.
New Interim Final Rule Issued to Implement the No Surprises Act
In late June 2021, the U.S. Departments of Health and Human Services (HHS), Labor (DOL), and Treasury (UDST) issued an interim final rule alongside the Office of Personnel Management to implement the legislation. The rule is the first of many anticipated provisions the government plans to introduce to help implement the law, which goes into effect on Jan. 1, 2022.
The final interim rule can be reviewed in full by visiting CMS.gov. Per ACA International, the HHS is seeking comments regarding the provisions, which must be submitted by Sept. 7, 2021.
How Will the No Surprises Act Impact Employer Healthcare Plans?
For the most part, the No Surprises Act won’t directly impact costs associated with employer-sponsored healthcare coverage. With that said, the law will almost certainly relieve burdens associated with unexpected out-of-network costs.
Source: Bernie Portal