Last updated: 12/16/2024

On December 27, 2020, the No Surprises Act (NSA) was signed into law under the Consolidated Appropriations Act of 2021. The law went into effect January 1, 2022 and applies to services covered by health plans that begin on or after that date. Although many states have enacted laws against surprise billing, most of these laws do not apply to consumers who receive health coverage from large, self-insured employers. The Kaiser Family Foundation estimates that in 2020, about 67% of workers who received coverage through an employer were covered under a self-funded health insurance plan, which are governed under federal law (the Employee Income Retirement Security Act, or ERISA) and are exempt from most state insurance laws.  However, the NSA's federal protections cover consumers with employer-based insurance as well as individual market health plans from receiving surprise medical bills under these specific circumstances:

• Most emergency services, including emergency post-stabilization services.
• Non-emergency care from out-of-network (OON) providers (such as anesthesiologists and pathologists) at in-network facilities.
• Out-of-network air ambulance companies.

Multiple studies find that consumers worry about surprise medical bills and the negative impact they may have on personal finances. A 2020 survey conducted by the NAIC’s Center for Insurance Policy and Research (CIPR) discovered that surprise medical bills were a concern for more than 60% of consumers.  Additionally, a study by the Kaiser Family Foundation found that two-thirds of Americans are worried about the burden of a surprise medical bill, with good cause:  A retrospective analysis published in the Journal of the American Medical Association (JAMA) in 2020 reported that 20% of emergency room visits and 10% of elective surgeries carried the risk of a surprise out-of-network medical bill.  The average costs of these bills can range from $750 to $2,600.  Since an estimated 40% of consumers would borrow to pay an unexpected $400 expense, surprise medical bills could be financially catastrophic. The implementation of the NSA should help alleviate some of these concerns and give consumers the confidence to pursue medical care they may otherwise forego due to monetary concerns.

Background: The term "surprise medical bills" can confuse consumers, as it suggests any unexpected bill qualifies. However, under the No Surprises Act (NSA), it specifically refers to bills from out-of-network (OON) providers and facilities the patient did not choose. Surprise bills occur in three primary scenarios: (1) Emergency care, where patients cannot research in-network providers or facilities, including bills from OON providers, freestanding ERs, and air ambulances; (2) Post-stabilization services, provided after a patient is stabilized in an OON hospital but before being transferred to an in-network facility with patient consent; and (3) Non-emergency care at in-network facilities, involving OON specialists like anesthesiologists or radiologists.

Surprise bills often involve balance billing, where OON providers charge patients the difference between the insurer’s payment and the billed amount. Prior to the NSA, balance billing was legal for privately insured patients, including air ambulance transports, which frequently result in bills ranging from $10,000 to over $50,000. The NSA prohibits balance billing for covered services, including air ambulance transport, where 50-69% of cases are OON. The act establishes a process for insurers to pay providers for covered OON services, leaving disputes over payment rates to arbitration and keeping consumers out of negotiations. 

The NSA also introduces protections for uninsured or self-paying consumers, requiring providers and facilities to offer good faith estimates (GFEs) for non-emergency services. These GFEs must include all related costs, such as tests and anesthesia. If actual charges exceed the GFE by more than $400, patients can dispute the excess. These measures ensure greater price transparency and prevent financial shocks for all consumers. 

Caveats

Though the No Surprises Act is estimated to protect 10 million Americans a year from surprise medical bills, there are some exemptions in the law that consumers should be aware of.  The No Surprises Act does not cover bills from:

• Ground ambulance transport.  Even though OON air ambulance transport is covered under the NSA, protection from bills arising from OON ground ambulance transportation are not.  A recent analysis from the Peterson-KFF Health System Tracker found that half of emergency ground-ambulance transports resulted in the potential for an OON bill for consumers with private health insurance.  The average cost of these bills is around $450.  Billing for these transportation services is complex since many emergency transport services are run by municipal and county governments and need to follow local regulations. County or municipal regulations make it difficult for publicly funded providers to contract with insurers as in-network service providers, yet statistics show that 62% of emergency ground ambulance transport was provided through local fire departments and other government agencies, with about 30% coming from private ambulance transport companies.  Despite no current federal rules, there is some relief for consumers in states with limited protections around OON balance billing for ground ambulance services (these state-level protections do not apply to consumers with employer self-insured plans). These states include Colorado, Delaware, Florida, Illinois, Maine, Maryland, New York, Ohio, Vermont, and West Virginia. Congress has expressed interest in revisiting the federal exemption on ground ambulance transport once it gathers more information from an advisory committee.
• In-network providers and facilities that are covered under the patient’s health insurance plan. Though some patients may get medical bills from in-network providers that they were not expecting (charges to cover a policyholder’s insurance deductible or cost-sharing), these are not “surprise bills” as defined in the NSA.  The NSA only covers OON providers and services that the patient did not voluntarily select.
• Out-of-network providers who do not practice at an in-network facility. In situations where a consumer has more choice of provider, the provider may send a balance bill for charges beyond what the consumer’s health plan pays. Consumers who receive non-emergency services away from a facility, or at an out-of-network facility, may face balance bills.
• Certain medical facilities.  Not all medical facilities are covered under the NSA. Some exceptions include urgent care centers, birthing centers, hospice facilities, addiction treatment centers, and nursing homes. Before obtaining services at these facilities, patients should inquire whether health care providers bill independently and if they are in-network.

Additionally, in certain situations facilities can ask patients to sign a consent form that waives their rights under the NSA, allowing the provider to charge the patient for OON services.  There are restrictions on use of this form.  For example, providers cannot ask patients to sign these forms for emergency care or for providers they do not voluntarily choose.  The NSA allows a provision for waiving patient rights under the NSA, such as after emergency care has been administered and the patient is stabilized, though this is only permissible when 4 specific criteria have been met. Though it is suggested that waiving one’s rights under the NSA should only be used in limited circumstances (the person filling out the form is knowingly and intentionally seeking OON care), it is estimated that “consumers will give consent to waive NSA protections in 50% of post-stabilization claims and for 95% of non-emergency services provided at in-network facilities.”

Uninsured and self-paying consumers also have some protections concerning the transparency of costs when receiving care. The provisions of the NSA require most facilities to give these patients a good faith estimate (GFE) of all costs relevant to the non-emergency service they are seeking.  For example, if a patient needed surgery, the GFE would include the cost of the surgery, as well as any labs, tests, and anesthesia services associated with the procedure. If the actual costs exceed the GFE by at least $400, patients can dispute the excess charges.

Federal and state laws on surprise billing

As of February 2025, the Centers for Medicare & Medicaid Services (CMS) has reported the resolution of more than 16,000 complaints since January 2022, culminating in restitution amounting to $11.3 million for consumers and providers. Current enforcement initiatives emphasize transparency, as evidenced by the Centers for Medicare & Medicaid Services (CMS) publishing quarterly reports that delineate complaints lodged against insurers and healthcare providers. Frequent infractions encompass unexpected invoicing for non-emergency services, totaling 4,286 instances, as well as noncompliance with the stipulations pertaining to the Qualifying Payment Amount (QPA), which accounts for 1,035 cases. The coordination between federal and state entities to enhance NSA protection is under considerable pressure, given that the Centers for Medicare & Medicaid Services (CMS) directly addresses only 35% of complaints.

At the Federal level, federal agencies—including the Departments of Health and Human Services (HHS), Labor, and Treasury—have developed detailed implementation guidelines, such as requiring healthcare providers and insurers to furnish clear and transparent cost-sharing information. A cornerstone of the NSA is the Independent Dispute Resolution (IDR) process, established to mediate payment disputes between insurers and out-of-network providers. Criticism has arisen over potential biases in the IDR process, with providers advocating for a fairer approach to determining appropriate reimbursement rates. Despite these challenges, the act has bolstered patient protections, particularly in emergency care settings, ensuring that cost disputes occur between payers and providers rather than patients.

Efforts to improve the implementation of the NSA are ongoing at the legislative, regulatory, and judicial levels. The proposed federal regulations for 2025 aim to streamline the IDR process and eliminate communication barriers between payers and providers. These regulations may necessitate that payers furnish supplementary information during the initial payment or denial notices, including the plan or issuer's legal business name, the plan sponsor's name, and the IDR registration number. Furthermore, there is a consensus to enhance the enforcement of the NSA to address instances of noncompliance, such as late or unpaid claims.

Status: The Consumer Information (B) Working Group works to develop information and resources to help state insurance regulators in assisting consumers to better understand health insurance. In 2021 the group developed a document template for state insurance departments, New Protections from Surprise Medical Bills to educate consumers about the NSA’s consumer protections. The document explains the basics of balance and surprise bills, as well as highlights of the NSA, and closes with example scenarios of surprise bill protections that consumers may commonly experience.