No Surprises Act

In addition to the Transparency in Coverage requirements now in effect (see here), Congress passed in 2020 the “No Surprises Act” that regulates out-of-network bills submitted by out-of-network providers.

In the past, in addition to any out-of-network cost-sharing a plan participant might have owed (like coinsurance or co-payments), the out-of-network provider or facility could bill an insured for the difference between the billed charge and the amount his or her health plan paid (unless banned by state law). This was called by an innocent-sounding euphemism called “balance billing.”  What this term really meant was unexpected and surprise billing!

These billing problems most often arose from emergency room services when an insured inadvertently received care from  hospitals, doctors, or other providers they did not choose.

Now, under the new No Surprises Act, doctors and hospitals may not bill patients more than the in-network cost sharing amount for services provided. A penalty of up to $10,000 for each violation can apply.

Before the No Surprises Act, many out-of-network doctors and hospitals billed patients directly for their full, undiscounted fee, leaving to patients to submit the out-of-network claim to their plan for reimbursement. That practice has now changed.

Currently providers must determine the patient’s insurance status and then submit the out-of-network bill directly to the health plan. The health plan must then respond within 30 days, advising the provider of the applicable in-network cost sharing amount for that claim.

Cost-sharing will be based on the median in-network rate the plan pays for the service. The health plan then sends an initial payment to the provider and sends the insured an EOB, which must indicate the in-network cost sharing amount the patient owes the out-of-network provider.

Only at this point is the out-of-network provider allowed to send the patient a bill for no more than the in-network cost sharing amount.

If you are a participant in an employer-covered health plan and need help processing an out-of-network payment demand, feel free to contact us for free assistance.




What is the purpose of the No Surprises Act?

The No Surprises Act targets out-of-network providers who perform services you are unaware of. These typically relate to emergency room services.

How much can an out-of-network provider bill me?

An out-of-network provider must now base his bill on the amount allowed by your plan for the in-network price for the same item or service.

What if the out-of-network provider asks me to waive the No Surprises Act?

If you sign a waiver allowing the out-of-network provider to bill a higher amount, then the higher bill will be allowed. The premise of this exception is that if you sign a waiver allowing a higher amount, the bill is no longer a “surprise bill.”

How does the out-of-network billing process now work?

Under the No Surprises Act, the out-of-network provider must take the following steps to get paid:

1. determine the coverage status of the insured (patient);

2. submit a bill directly to the the plan administrator;

3. within 30-days, the plan administrator must pay the in-network rate for the item or service;

4. the out-of-network provider can then (and only then) bill the insured (patient) directly for any cost sharing liability required under the group health plan.


Can an out-of-network provider still bill the patient direct at the time of service?

No.  An out-of-network provider must now follow the steps outlined above to get paid.  He or she can no longer directly bill a patient for the total amount of the item or service provided.

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