At the end of 2020, Congress passed the Consolidated Appropriations Act of 2021 (CAA), which included the No Surprises Act. The No Surprises Act is intended to protect individuals from surprise medical bills for out-of-network medical services specifically related to emergency care, air ambulance services, and out-of-network treatment at an in-network facility.

What is surprise balance billing?

Surprise billing occurs when individuals get medical care outside of their plan's network, and their providers and health plans cannot settle on a payment amount that is acceptable to the provider. In those cases, patients are often left with the balance of the bill for their care. In other words, those amounts that the provider charged but the health plan left unpaid. These balance bills are particularly shocking when a patient experiences a medical emergency and is unable to pick their provider or when a patient carefully selects an in-network healthcare facility and then unknowingly receives care from an out-of-network provider within the facility.

The No Surprises Act is intended to remedy these types of surprise bills by shielding patients from charges beyond the in-network cost of the treatment for protected services. In these cases, providers are simply prohibited from billing the patient for any amount that exceeds what the patient would have had to pay them if the provider had been in-network. Any additional costs are instead passed on to the health plan, at which point the plan can either accept the cost and remit payment or enter arbitration with the provider. Very specific regulations have been issued explaining how this arbitration process, known as “independent dispute resolution,” will work.

It is important to keep in mind that the No Surprises Act does not cover all circumstances when a person may receive out-of-network care. For example, the surprise billing ban does not apply to regular vehicular ambulance services, nor does it address situations when an individual voluntarily elects to see an out-of-network provider. This might include a specialty care office visit or a procedure scheduled in advance with an out-of-network provider through an in-network facility. In those cases, the provider is still allowed to balance the bill.

Note that while many provisions of the No Surprises Act that do not actually relate to surprise billing have been postponed, the prohibition on surprise billing itself has not. The surprise billing prohibitions go into effect for plan years beginning on or after January 1, 2022. Plan sponsors are also required to issue a notice informing participants of these new rules in advance of the beginning of the plan year.