What is the No Surprises Act?

According to an analysis by Peterson-KFF, a partnership between two health care-focused nonprofits, about 18% of emergency visits lead to a surprise medical bill. And even when people receive in-patient care, about 16% get a surprise charge.

That’s why the federal government’s No Surprises Act (NSA) was signed into law in late 2020 and went into effect on January 1, 2022. The law offers several consumer protections that can help prevent you from having to pay unexpected medical costs and limit how much you have to pay when receiving out-of-network care.

Read on to learn more about the NSA. 

Key takeaways

• The NSA can help protect you from surprise medical bills, also known as balanced billing.

• These can happen when your health insurance refuses to cover emergency services out of network because you didn’t get prior authorization. Or, when you get charged extra by an out-of-network provider at an in-network facility.

• The law applies to most health plans from employers, marketplace plans and plans you buy directly from insurance companies.

The NSA forces health insurance plans and health care providers to apply in-network rates and cost-sharing amounts to certain situations. It also offers some protections for uninsured people. It does this by:  

• Banning your health plan from charging you out-of-network rates for emergency care and certain post-stabilization services—even if you get treated by out-of-network providers without prior authorization. The NSA also covers air ambulances for emergency and nonemergency transportation but doesn’t cover ground ambulances.

• Prohibiting health plans from charging you out-of-network rates if you’re at an in-network facility and receive care from an out-of-network provider, such as a radiologist or anesthesiologist.

• Requiring providers to charge in-network rates for up to 90 days if they become an out-of-network provider.

• Allowing uninsured patients who ask for a good faith estimate to dispute any charges that are more than $400 above the estimate. 

The law can be enforced in several ways, such as requiring providers to deal with your insurer before billing you directly and charging providers and health insurance companies penalties for breaking the law.  

The NSA covers people who have health insurance through an employer or from a federal- or state-run marketplace, as well as those who buy coverage directly from insurance providers—including those who have older plans. It doesn’t cover you if you have Medicare, Medicaid, Indian Health Service, VA health care or TRICARE. But other laws may already protect you from surprise medical bills. 

Historically, surprise medical bills generally come from situations when you receive care from an out-of-network provider or facility without realizing it. This can happen when you’re incapacitated and can’t choose where to go or because you don’t realize that one of the providers in the room isn’t in-network.

Additionally, surprise medical bills can be the result of a provider charging you a higher rate. Health plans often negotiate rates with providers, and in-network providers have to charge you the negotiated rate and accept it as the full payment.

But out-of-network providers might charge you a higher nonnegotiated rate directly. This is also known as “balance billing” because you’re charged the balance between what the provider charges and your health plan’s allowed amount for the service.

Here are two examples of how surprise medical bills can happen:

• You’re hit by a car while walking your bike and brought to a nearby emergency room. Although you didn’t have any choice in the matter, you later find out that the emergency room wasn’t in-network with your insurance, and you receive a surprise bill for the amount your insurance doesn’t cover.

• You go to an in-network facility for an operation. You don’t get to pick the anesthesiologist, but you later find out they’re an out-of-network provider, and the anesthesiologist sends you a bill directly. 

These types of surprise bills, or balance billing, can leave people deep in debt—even if they’re insured. And if you can’t afford the bills, the unpaid amount might even be sent to collections and hurt your credit.

The NSA doesn’t prevent you from having to pay for health care. You still may have to pay your deductible and your share of the cost-sharing, such as coinsurance or copayments. There are also several exemptions to be aware of, such as:

• The NSA doesn’t cover ground ambulance services.

• Out-of-network providers can still balance bill you based on out-of-network rates if they receive your written consent at least 72 hours before delivering services. 

• You’re not covered if you receive elective services at an out-of-network facility. 

The NSA also only covers services in hospitals, hospital outpatient departments, critical access hospitals and ambulatory surgical centers. That means you might not receive these protections if you get health care from other facilities, such as clinics, birthing centers and urgent care centers.

If you receive a surprise bill, your next steps may depend on whether you have insurance:

You generally shouldn’t be responsible for surprise medical bills, and out-of-network providers should bill your insurance plan before billing you directly. The provider and your plan should also negotiate the payment amount without involving you. However, if you receive a surprise bill or your insurance plan denies a claim, you can ask your insurance company to review the claim. 

You can also submit a complaint to the No Surprises Help Desk at the Centers for Medicare and Medicaid Services (CMS), which can review the situation to make sure your plan and providers followed the law.

When you don’t have insurance, you should receive a good faith estimate before you receive care. If your bill is more than $400 over the estimated amount, you can file a dispute as long as it hasn’t been more than 120 days since you got the bill. Start by reviewing the requirements and then filing the dispute online. There’s a $25 upfront administrative fee, but the amount gets taken out of what you owe the provider if a third-party arbitrator rules in your favor.

The NSA offers much-needed protections that can keep you from having to pay unexpected medical bills from out-of-network providers during an emergency and in certain nonemergency situations. But the NSA doesn’t do away with medical bills altogether—it just limits when you might receive an unexpectedly high bill from out-of-network providers.

If you’re struggling to pay your share, learn about six assistance options for paying medical bills.