No Surprises Act
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| No Surprises Act | |
|---|---|
| Title | No Surprises Act |
| Enacted by | 117th United States Congress |
| Enacted | 2020 |
| Effective | 2022 |
| Signed by | Donald Trump |
| Related legislation | Consolidated Appropriations Act, 2021, Affordable Care Act, Medicare Access and CHIP Reauthorization Act of 2015 |
No Surprises Act The No Surprises Act is a United States federal law enacted by the 117th United States Congress and signed by Donald Trump in 2020 that addresses unexpected medical billing practices. The law interacts with statutes such as the Affordable Care Act and programs including Medicare and Medicaid to limit out-of-network charges for services arising from emergency care, ancillary services, and certain scheduled procedures. It established new notice, billing, and dispute resolution mechanisms affecting stakeholders like the American Medical Association, Kaiser Permanente, Aetna, and UnitedHealthcare.
Background and legislative history
The Act emerged amid high-profile cases involving surprise bills tied to facilities like Rural Health Clinics and events publicized by outlets such as The New York Times, The Washington Post, and ProPublica. Advocacy groups including Families USA, Patient Rights Advocate Center, and Community Catalyst joined insurers such as Blue Cross Blue Shield Association and provider organizations like the American Hospital Association in debates during hearings before the House Energy and Commerce Committee and the Senate Health, Education, Labor and Pensions Committee. Legislative predecessors and related initiatives include state laws in New York (state), California, Texas, and Florida that influenced negotiations during markup sessions on the Consolidated Appropriations Act, 2021. Policymakers such as Chuck Schumer, Mitch McConnell, Nancy Pelosi, and Kevin McCarthy figured in floor debates prior to enactment.
Key provisions
Major provisions bar balance billing for emergency services at locations like emergency departments and for ancillary services provided at facilities such as Ambulatory surgical centers and Hospitals. The statute requires advance notice and consent forms for scheduled out-of-network care used in contexts like referrals to Radiology or Anesthesiology and mandates that plans apply in-network cost-sharing for covered services provided by out-of-network clinicians such as Orthopedic surgeons, Cardiologists, and Emergency medicine physicians. It created an Independent dispute resolution mechanism and set billing protections for patients in Group health plans and Individual health insurance markets administered by entities like Centers for Medicare & Medicaid Services and private carriers including Cigna and Humana.
Implementation and enforcement
Regulatory implementation involved rulemaking by the Department of Health and Human Services, the Treasury Department (United States), and the Department of Labor. Agencies issued guidance and interim final rules to operationalize payment parameters, notice requirements, and data collection tied to programs like TRICARE and Indian Health Service. Enforcement relies on agencies including the Office for Civil Rights, state regulators such as New York State Department of Financial Services, and accreditation bodies like The Joint Commission to monitor compliance and levy corrective actions. Stakeholders engaged through agencies' rulemaking comment periods alongside organizations like American Hospital Association and Federation of American Hospitals.
Impact on patients and providers
Patients previously exposed to surprise balance bills—documented in analyses by Centers for Disease Control and Prevention, Urban Institute, and Kaiser Family Foundation—experienced reductions in unexpected charges under the law. Providers, including independent Anesthesiology groups, Radiology groups, and physician practices affiliated with systems such as Mayo Clinic, Cleveland Clinic, and Johns Hopkins Medicine have had to adapt contract negotiations with insurers like Anthem, Inc. and Centene Corporation. Hospitals and health systems faced operational changes to billing offices, while employers such as Walmart and Amazon (company) that sponsor self-insured plans adjusted plan provisions. Trade associations including the American Medical Association and American Hospital Association tracked financial and administrative effects.
Dispute resolution and independent dispute resolution (IDR)
The Act established an arbitration-like Independent dispute resolution (IDR) process administered by certified entities to resolve payment disputes between providers and health plans. IDR invokes a baseball-style resolution where arbitrators consider factors such as the qualifying payment amount, provider credentials, and market rates from sources like Fair Health and Medical Group Management Association. Participants including large physician groups, regional insurers, and third-party administrators must submit offers and documentation; certified IDR entities apply standards drawing on prior decisions from entities like state insurance commissions. The process replaced many bilateral negotiation pathways and created a new body of case law and administrative precedent.
Legal challenges and litigation
Litigation arose from parties contesting regulatory interpretations and procedural aspects, with cases filed in federal courts including the United States District Court for the District of Columbia and the United States Court of Appeals for the District of Columbia Circuit. Plaintiffs ranged from provider coalitions to insurer trade groups, and cases referenced statutes like the Administrative Procedure Act and doctrines developed in precedents such as Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. and King v. Burwell. Outcomes included remands, stays, and settlements involving entities like Physicians for Fair Coverage and insurers represented by firms such as Sidley Austin and Covington & Burling.
Policy debates and proposed reforms
Debates focus on comparative analyses by think tanks including the Brookings Institution, Heritage Foundation, Urban Institute, and Commonwealth Fund over whether IDR rules create incentives affecting network adequacy for plans overseen by the Centers for Medicare & Medicaid Services. Proposed reforms include adjustments to the IDR criteria, greater data transparency via entities like Centers for Medicare & Medicaid Services data initiatives, adoption of benchmark payment rates similar to those in Medicare Physician Fee Schedule updates, and state-federal coordination modeled on frameworks in New York (state) and California. Policymakers such as Katie Porter, Ron Wyden, and Kevin Brady have sponsored or advocated amendments and oversight hearings examining impacts on stakeholders including insurers, hospitals, and patient advocacy groups like Consumer Reports.