Understanding the Implications of The No Surprises Act

March 21, 2022 

NSA Series: Part 1 of 9

On January 1, 2022, the No Surprises Act (NSA) came into effect, providing federal guidance in the US around medical billing and the true cost of healthcare. Nestled under the Consolidated Appropriations Act, this law protects patients from surprise medical bills that arise when the patient is treated by an out-of-network (OON) provider or at an OON facility. The new surprise billing protections apply to all commercially insured patients for all OON services where surprise bills are common. NSA covers emergency care at OON facilities, non-emergency care from OON providers at in-network facilities and air ambulance services from OON providers.

The law includes requirements for group health plans, group and individual health insurance issuers, carriers under the Federal Employees Health Benefits (FEHB) Program, healthcare providers and facilities and providers of air ambulance services. 

The law bars OON providers from billing patients more than in-network cost-sharing amounts for:

  • All out-of-network emergency facilities and professional services.
  • Post-stabilization care at out-of-network facilities until safe transfer to a different facility is possible.
  • Air ambulance transports (emergency or non-emergency).
  • Out-of-network services delivered at or ordered from an in-network facility, (e.g. hospital or ambulatory surgery center) unless the provider follows the new notice and consent process.

The NSA applies to people who get their coverage through their employer, the federal marketplaces, state-based marketplaces or an individual market health insurance issuer. This rule does not apply to people who get their coverage through programs that already prohibit balance billing, such as Medicare, Medicaid, Indian Health Services, Veterans Affairs Health Care, or TRICARE.


The Goal of the NSA and Why It Matters

Medical debts are a crippling financial burden for many Americans and can be a contributing factor in personal bankruptcy claims. Surprise medical bills often play a significant role in these devastating personal finance crises. Until the bill was passed, the US lacked federal legislative guidance for surprise billing and price transparency around the cost of healthcare. The lack of Federal legislation around price transparency enabled both payers and providers alike to conceal the true cost of healthcare and their profit. The NSA intends to change the landscape for payers, providers, and patients.

This new law was brought in to address the root problem of many surprise bills — the patient’s lack of understanding how the US healthcare operates. Until now, surprise medical bills typically happened in one of three ways:

  • during a medical emergency, if a patient was taken to an OON facility
  • during a medical emergency, if a patient was taken to an in-network facility but received treatment from OON physicians 
  • during elective medical care, if this was delivered by OON ancillary providers (e.g. anesthesiologists and assistant surgeons) 

This legislation aims to protect many Americans from surprise medical bills. It promises to give patients more information by lifting the veil on costs and charges. Patients will no longer be at risk of large surprise out-of-network bills that arise when receiving emergency care, undergoing elective procedures, or being transported by air ambulance.

The NSA seeks to make pricing, costs, and profits more transparent to consumers, providers and payers. Lawmakers enacted the legislation to offer overarching federal guidance to replace current patchwork state-level efforts, which has resulted in inconsistent lawmaking and enforcement.


The NSA’s Main Provisions

Emergency Services

The NSA now requires emergency services provided in hospital emergency departments, freestanding emergency facilities and urgent care centers that provide emergency services to be covered without any prior authorization (i.e., patients do not need to get approval beforehand) and regardless of whether a provider or facility is in-network. For example, in an emergency, often patients will be taken to the closest facility and treated by any available staff, regardless of their network status. In these instances, the patient cannot be billed the out-of-network charges. Rather, the NSA mandates that in most emergency situations, the patient can only be billed the in-network rate.

In the past, if a patient with a group health plan or health insurance coverage received care from an out-of-network provider, their health plan would be billed the out-of-network rates. This resulted in the patient having to pay the out-of-network, non-contracted fee which is exponentially higher than the in-network contracted rate their plan would have been charged if an in-network provider had cared for them. These exorbitant fees will no longer be the case in emergency situations.


Non-Emergency Services

Under the NSA, patients may still choose to receive care from a provider or facility that isn’t in their health plan’s network. In such cases, OON providers of non-emergency services may bill enrollees an amount greater than the in-network cost-sharing amount—but only if they first satisfy the NSA’s notice and consent exception. To do so, the provider must give the enrollee: 

  • Written or electronic notice of the provider’s out-of-network status.
  • A list of in-network providers that the enrollee could see instead.
  • A Good Faith Estimate of the enrollees' charges. 

If opting to receive treatment from an OON facility or provider, patients must sign a form acknowledging that they are giving up their protections under the law, that they may owe the full costs billed for items and services received, and that their health plan might not count any of the amount pair towards their deductible and out of-pocket limit.


Relevant sections of the NSA

Of course, most of the 18 sections of the NSA pertain to patients who are seeking treatment from in-network providers and facilities. Of these sections, this blog series will focus on the four following provisions: the Advanced Explanation of Benefits, Good Faith Estimate (GFE), cost comparison tool, and provider directory explained in more detail below. As a health information technology company focused on delivering better global health through open standards, we have focused on the provisions that will benefit from the use of FHIR, specifically sections 111 and  112, or mandate the use of FHIR standard, such as the sections 114, and 116.

Section 111 of the NSA calls for an Advanced Explanation of Benefits (EOB). This document lays out what portion of services will be covered by the health plan and what portion must be paid out-of-pocket by the patient. It offers consumer protections through fair and honest advance cost estimates through health plan requirements.

There is an important timing aspect to the Advanced EOB. The health plan must provide it electronically or via mail (as requested by the participant) to patients before scheduled care or upon patient request before scheduling. If the service is scheduled within ten days, it must be provided no later than one business day. If the service is scheduled in more than days, health plans must provide it within three business days. 

Section 112 mandates healthcare providers or facilities to provide a Good Faith Estimate (GFE) to plans or insurers (or if uninsured, the individual) with a well-educated cost approximation in clear and understandable language.

Providers must provide GFEs when items or services are scheduled or when requested by a patient. If the service is within ten business days, providers or facilities must provide a GFE no later than one business day after scheduling. If the service is scheduled for more than ten business days in advance or the patient requests it, a GFE must be provided within three days. 

According to Section 114, health plans must offer a cost comparison tool that allows enrollees to compare expected out-of-pocket costs for items and services across multiple providers both online and over the telephone. This tool allows enrollees to compare the amount of cost sharing for a specific item or service by any participating provider. It should be noted that the CMS Transparency in Coverage rule also mandates that all group health plans build and maintain a cost-comparison tool both online and in print. Due to the duplicative nature of the two rules, the US Department of Health & Human Services (in their August FAQ) suggested that the two cost comparison tools may be amalgamated. Therefore, all payers would be responsible for creating and maintaining a cost comparison tool that allows enrollees to compare costs in print, over the telephone, and online by January 1, 2023. 

Section 116 states that plans must maintain an accurate provider directory and update it regularly. Health plans must remove providers who are no longer in-network in a timely manner. If they fail to do so and an enrollee provides documentation that he or she received incorrect information from the health plan regarding a provider’s network status, then the enrollee will only be responsible for the in-network cost-sharing amount. 

Providers are also required to contribute to the maintenance of the provider directory by notifying the health plans when they begin a contract with a new network, terminate a contract with a network, or make any material changes to their existing contract.

Each of these provisions, as well as the other fourteen, of the NSA went into effect on January 1, 2022. However, their enforcement dates vary. Due to the complexity of the technical infrastructure needed to build and maintain these provisions, HHS has delayed enforcement pending further rulemaking. At the moment, HHS has not given clear enforcement dates for the GFE, AEOB, or Provider Directory. In the FAQ, it was suggested that the cost-comparison tool would be enforced beginning January 1, 2023.


The Implementation Challenges

The NSA mandates significant data exchange between providers and health plans within very short time frames. For example, complex surgeries often include multiple providers across multiple specialties—all of whom are required to submit GFE and Advanced EOB. Adding to the complexity, these estimates must be sent within one business day in some situations. 

At present, the NSA has not yet mandated a standard or format for data exchange to meet its requirements. It is expected, however, that lawmakers will mandate use of Fast Healthcare Interoperability Resources (FHIR) based on the large volumes of data exchange required. These standards support the rapid exchange of healthcare data and are capable of supporting the complexity and short turnaround times involved in meeting the NSA mandates. 

As a group of leading HL7 FHIR experts, our Smile Digital Health team is always eager to support opportunities for streamlined healthcare data exchange. Because of our recognized expertise in this area, we are working with the Da Vinci Project, a private sector initiative that uses a rapid multi-stakeholder process to address HL7 FHIR use cases that can be implemented on a national basis. Working alongside this talented team, we’re co-authoring Implementation Guides for the GFE and the advanced EOB aspects of the NSA. Together, we hope to accelerate the adoption of HL7® FHIR® as the standard to support and integrate medical billing price transparency to the benefit of millions of Americans.

At this point, the full financial benefits and implications of the law are unknown. The Congressional Budget Office estimates that the NSA will reduce commercial insurance premiums by 0.5% to 1%. Current projections estimate that taxpayers will save $17 billion over ten years. It may save healthcare consumers about twice that much between reduced premiums and cost-sharing. The Act will also significantly alter future contracting between providers, facilities and health insurance providers. However, any savings are dependent on how the law’s new arbitration process is administered, since it’s possible that providers could leverage it to extract even higher prices. Regardless of the exact details of its implementation, the NSA promises one thing: US patients will have one less worry when accessing healthcare. 

Learn more about the NSA—and how it will affect your business—in our upcoming comprehensive blog series.

Part 1: Implications of NSA 

Part 2: NSA Glossary of Terms

Part 3: Understanding Key Provisions