What Is the No Surprises Act?

Navigating the healthcare system is already tricky for patients due to its complexity, access barriers, and financial burdens. Patients face challenges like understanding insurance policies and navigating communication gaps across healthcare networks. System-wide issues like long wait times and high costs also contribute to their difficulty. 

Unfortunately, many also face another layer of anxiety: receiving an unexpectedly large medical bill after seeking care.  

Consider this: a patient goes to an in-network hospital for a procedure, only to receive a separate, massive bill from an anesthesiologist they didn’t choose and didn’t know was out of network.  

Or the patient who sees their primary care physician of 10 years, only to later find out the doctor recently decided to participate with all major health plans—except for their specific plan. These “surprise medical bills” can create headaches and financial hardship. 

To address this, the No Surprises Act was passed. Taking effect on January 1, 2022, this federal law provides vital financial safeguards for patients. It aims to prevent most surprise bills by regulating how healthcare providers can bill for certain types of out-of-network care. 

This article breaks down the No Surprises Act, what it covers, and how it affects patients. We also discuss how the No Surprises Act affects healthcare practices, how it enhances patient financial transparency, and steps you can take to improve your practice’s billing processes to stay compliant.  

FROM ONE OF OUR PARTNERS: No Surprises Act- Provider Impacts & Future Solutions 

Why the No Surprises Act Was Created 

The core problem the NSA targets is “balance billing.” This happens when an out-of-network provider bills patients for the difference between what they charged and what their insurance company paid. Before the Act, this was a common and frustrating issue.  

In fact, a National Association of Insurance Commissioners (NAIC) Center for Insurance Policy and Research survey revealed that 60% of consumers are concerned about unexpected bills.  

For example, a patient might have a planned surgery at an in-network facility but be unknowingly treated by an out-of-network urologist or assistant surgeon. Weeks later, they would receive a bill for hundreds or thousands of dollars that insurance wouldn’t cover. 

These situations were not rare. An Office of the Assistant Secretary for Planning and Evaluation (ASPE) report revealed that a significant portion of emergency room visits and elective surgeries at in-network hospitals involved at least one out-of-network provider, leading to widespread surprise billing across the U.S. healthcare system. Other study statistics from the report include: 

• Patient out of network responsibility for emergency room surprise bills averaged $628, and for inpatient admissions, it averaged $2,040.  

• The unexpected costs represent significant financial distress for U.S. patients, 63% of whom report being unable to cover a hypothetical $400 emergency expense using only cash or its equivalent. 

The No Surprises Act was created to give patients peace of mind and protection from these financially devastating bills. 

What the No Surprises Act Covers 

The No Surprises Act protections are specific. Here’s a summary of what it covers, according to a KFF report: 

• Out-of-Network Emergency Care: The Act applies to most emergency services, including care received in hospital emergency departments and freestanding emergency rooms. Protections extend until the patient is stabilized and can be safely transferred to an in-network facility. 

• Non-Emergency Care at In-Network Facilities: If a patient receives care at an in-network hospital or ambulatory surgical center, they are protected from surprise bills from out-of-network providers involved in their care (like anesthesiologists or radiologists). The federal government estimates that 16% of 11.1 million in-network non-emergency facility stays for privately insured patients each year involve at least one out-of-network claim.  

• Air Ambulance Services: Protections also apply to out-of-network air ambulance services. Studies show air ambulance balance bills can range from $10,000 to more than $20,000.  

So, what are the limitations of the NSA? According to the Centers for Medicare and Medicaid Services (CMS), the law does not apply to all medical bills, including: 

• Ground ambulance services or care received in a physician’s office  

• Federally funded programs such as Medicare, Medicaid, Indian Health Services, TRICARE, or Veterans Affairs Health Care 

• Certain types of plans, such as account-based group health plans (like HRAs), limited-duration insurance, retiree-only plans, and stand-alone dental or vision plans  

How the No Surprises Act Protects Patients 

The No Surprises Act introduces several key protections to shield patients from unexpected costs and improve cost transparency in healthcare. One of the most significant items is the emphasis on cost transparency and patient consent.  

In most non-emergency situations where an out-of-network provider might be involved, they must give patients a plain-language notice and get their consent to waive protections. This notice must explain that they can choose an in-network provider instead and include cost transparency through a “Good Faith Estimate (GFE)” of the charges. 

For uninsured or self-pay patients, providers must also give a Good Faith Estimate of expected charges before a scheduled service. This helps prevent billing surprises by setting clear expectations upfront.  

More specifically, the GFE also includes anticipated charges for the primary service a patient receives and any other items provided as part of the same scheduled experience. For example, if a patient needs surgery, the GFE should contain surgery costs, lab services or tests, and anesthesia. 

The NSA also prevents balance billing for covered services. Instead of billing patients, out-of-network providers and the insurance company must negotiate payment, protecting patients from being caught in the middle. These patient rights under the No Surprises Act are a major step forward. 

What the No Surprises Act Means for Healthcare Providers 

For healthcare providers, the law introduced new responsibilities and processes. No Surprises Act compliance is now a critical part of billing operations. Hospitals, payers, and individual providers must update their documentation and communication workflows to meet the new requirements.  

If they don’t, the penalties are costly. For example, if a provider does not follow these rules, they can face a penalty of up to $10,000 for each violation.  

This shift also creates administrative and documentation challenges for providers. By requiring time-consuming processes like creating good faith estimates and notice-and-consent forms, and integrating compliance into existing systems, providers face new hurdles in billing management.  

These challenges strain resources and require new staff training, technological investment, and careful record-keeping to stay compliant. Providers also face challenges in managing billing and payment disputes, potentially involving the complex Independent Dispute Resolution (IDR) process. This is an arbitration system designed to settle provider-payer disputes without involving the patient.  

To avoid conflicts, providers are encouraged to improve their billing communication, ensuring patients understand who will be involved in their care and what their potential costs might be. Using an advanced electronic health record (EHR) system can alleviate the administrative burdens that can drain your time and energy when communicating billing information to patients.  

For instance, iSalus, an all-in-one EHR solution, offers a Patient Cost Estimator tool that helps your practice comply with the No Surprises Act. This feature helps provide your patients with accurate and transparent cost estimates needed for their medical procedures. It also helps take the guesswork out of creating a compliant GFE. 

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Challenges and Controversies Around the No Surprises Act 

While the No Surprises Act is a win for patients, putting it into practice hasn’t been without its struggles. First, the IDR process has faced many backlogs and administrative delays, leading to frustration for both providers and payers. 

Second, much of the No Surprises Act controversy stems from provider-payer disputes over fair payment rates. Some providers argue that the process unfairly favors insurance companies, potentially driving down reimbursement and making it harder for independent practices to operate.  

For example, provider groups, led by the Texas Medical Association (TMA), successfully sued the government over initial rules for the IDR. Federal courts found that the regulations improperly favored insurers by directing arbiters to prioritize the Qualifying Payment Amount (QPA)— or the basis for determining individual cost sharing for items and services covered by protections in the No Surprises Act—which providers argued was a very low benchmark.  

Because of these issues, there have been legal challenges and ongoing revisions to the rules governing the IDR process. Here are a few examples:  

• CMS released a proposed rule in 2023 to alter the Federal IDR process to speed up dispute resolution by certified IDR entities. 

• A group of House members introduced legislation in 2024 to increase penalties for No Surprises Act violations and add transparency reporting requirements.   

These growing pains are part of a larger effort to find a sustainable balance between protecting patients and ensuring fair compensation for care. 

How the No Surprises Act Improves Patient Financial Transparency 

Overall, the law is a big step forward for transparency around patient costs. Banning surprise bills and requiring upfront estimates gives patients the information they need to make better decisions about their care.  

This shift also helps rebuild trust between patients, providers, and payers. For instance, every interaction is an opportunity to build—or lose—trust with your patients. When billing is more transparent and predictable, it reduces financial stress for families and removes barriers to care.  

This focus on accurate estimates and fair billing practices promotes a more affordable and dependable environment for your patients, resulting in increased trust and loyalty. 

No Surprises Act FAQs 

What is the purpose of the No Surprises Act? 

The main purpose of the No Surprises Act is to provide balance billing protection for patients who receive unexpected bills for out-of-network emergency care or non-emergency care from out-of-network providers at in-network facilities. 

Who does the No Surprises Act protect? 

The No Surprises Act protects patients with health insurance who receive covered emergency care, non-emergency care from out-of-network providers at in-network facilities, and air ambulance services. It also provides rights to good faith estimates for uninsured and self-pay patients. 

Does the No Surprises Act apply to all medical bills? 

No. The No Surprises Act does not apply in all situations. For example, it does not currently cover ground ambulance services at the federal level. Protections can also be waived in some non-emergency situations if you give prior consent. 

How do I dispute a surprise bill? 

If you believe you have received a bill that violates the No Surprises Act, you can file a complaint with the US Department of Health and Human Services online or by phone. You can also contact your state’s department of insurance for help. 

What happens if a provider violates the Act? 

Providers who violate the No Surprises Act can face financial penalties. Investigating complaints and enforcing compliance is a key part of the law’s power.  

A Step Toward Fair and Transparent Healthcare 

The No Surprises Act is a significant move toward a more patient-centered healthcare system. It provides a crucial summary of rights and protections that shield patients from some of the most frustrating aspects of out-of-network billing.  

By limiting surprise medical bills and promoting cost transparency, the law helps ensure that patients get the care they need and builds trust between patients, providers, and payors. While challenges remain, the framework creates more predictable and efficient billing for providers.   

Changes in healthcare are inevitable. But having the right tools to manage these shifts can make all the difference in meeting these challenges—moving practices forward.  

Contact iSalus today to learn how advanced EHR solutions can work as an extension of your care team to help you navigate No Surprises Act and implement billing workflows with compliance in mind.