Last updated: 3/28/2023

Issue: 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 about half of 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 recent 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” may be confusing to consumers, as the name suggests any unexpected medical bill could be considered a surprise bill.  Indeed, in the CIPR survey sent to consumers, only about 25% of respondents selected the correct definition. Surprise medical bills, as defined in the NSA, are bills sent to consumers from out-of-network health providers and facilities whom the patient did not choose.  Surprise bills may occur in 3 distinct circumstances:

1. During a medical emergency where care is imminent and necessary, and the consumer does not have time to research which facilities and providers are in-network with their health insurance company.  The NSA covers surprise medical bills from OON providers, both on the ground and in the air. Along with traditional physical emergency rooms and freestanding emergency departments, bills from emergency air ambulance services are also included.
2. Post-stabilization services following emergency care in a hospital.  This refers to care administered after a patient is in stable condition following an emergency. Post-stabilization services provided at an OON facility are no longer considered emergency care once a physician declares the patient can be moved safely to another in-network facility using non-medical transport, a facility is available and accepts the transfer, and the transfer will not cause unreasonable burdens to the patient. The NSA also requires that the patient must give written consent to be transferred.
3. Non-emergency services provided at in-network facilities, such as OON anesthesiologists, radiologists, and other ancillary care providers whom the patient did not select but who provide services for the in-network facility they did choose. These providers bill for services separately from the facility and do not necessarily contract with the same health plans as the facility.

Surprise bills include the practice of balance billing, where OON providers may charge the patient the difference between what the patient’s plan paid and the amount originally billed by the OON health provider.  Before the NSA was implemented, OON providers could legally pursue payments from patients. This is now a prohibited practice for services covered by the NSA and is especially relevant to air ambulance transport, which are typically used in emergency situations where consumers have no time to choose an in-network service provider (statistics show between 50-69% of air ambulance transports are OON).  Prior to the NSA, privately insured patients (but not Medicaid or Medicare patients) could be balanced billed for air ambulance services.  Studies report that air ambulance balance bills can range anywhere from $10,000 to over $20,000, with some news stories focusing on patients receiving bills for over $50,000.  In 2017, the median cost of a medical helicopter transport was about $36,400 and $40,600 for an airplane transport, and prices are only expected to rise.

The NSA establishes a process to determine the amount an insurer must pay a provider for a covered OON service. The patient would then need to pay for any coinsurance or deductibles they would normally pay an in-network provider.  If there is any dispute about the payment rates between the insurer and provider, the NSA includes an arbitration process to settle differences between those two parties.  This leaves the consumer out of the negotiation process, saving valuable time and avoiding potential frustrations.

Though the NSA primarily covers consumers with insurance, uninsured or self-paying consumers also have some protections regarding price transparency for medical services they are seeking.   It is now required for most providers and facilities to give uninsured patients a good faith estimate (GFE) of all costs relevant to the non-emergency service(s) 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 $400, patients can dispute the excess charges.

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

Some states already have laws against surprise medical billing.  As of February 2021, at least 18 states had comprehensive protections, while 15 states had laws partially protecting consumers against surprise medical bills.   View this state map to see what level of protection is available for specific states.

Due to limitations on state laws and authority, some states may not enforce NSA protections for certain services, such as post-stabilization emergency care, or for certain health plans (PPOs vs. HMOs), or even certain providers (air ambulances).  However, some state laws may offer stronger consumer protection than the NSA provides, such as state laws on surprise billing for ground ambulances.  In those instances, a state would enforce their own laws, at least for state-regulated plans. State laws would not affect consumers who have health insurance through self-funded employers since they are governed by federal law (ERISA).

NAIC Status: In 2021, The Consumer Information (B) Subgroup 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.