Despite New Law, Consumers Feel Ambushed by Surprise Medical Bills

The No Surprises Act, billed as protection for patients against surprise medical bills, took effect on New Year's Day 2022. But has the federal law actually curbed health care charges at high out-of-network rates, as well as certain forms of “balance billing” for the portion of provider charges not covered by insurance?

The new law’s provisional report card is decidedly mixed.

Health insurers trumpet the number of surprise bills that the law is preventing but worry about the potential burden of claims disputes.

Analysts believe the law is written to provide substantial consumer protections, but they haven’t yet seen data sufficient to judge compliance.

Health care consumers give a lower grade, according to a June poll by Morning Consult. One out of five respondents said they had received an unexpected medical bill in the first half of the year, the poll found. But it’s unclear how many of those surprises — if any — should have been blocked by the limited protections of the No Surprises Act.

The law prevented more than 9 million potential surprise bills from reaching commercially insured patients to date, according to a study released Nov. 17 by AHIP, an insurance industry trade group, and the Blue Cross Blue Shield Association.

The study also said that health care providers have filed 275,000 claims to a federal arbitration process established by the bill to independently resolve disputes between plans and providers — nearly 10 times what was expected by the government, authors of the study say.

While lauding the bill's effectiveness to date in preventing surprise bills, David Merritt, senior vice president of policy and advocacy for the BCBSA, said in a press release that he is concerned by the volume of claims: "The tens of thousands of arbitration claims filed by providers clearly demonstrate that more needs to be done to ensure that they don’t abuse the system for their financial gain."

Analysts, meanwhile, are taking a wait-and-see approach to the bill's long-term effectiveness.

“It’s very difficult to figure out whether the law is actually being implemented because the issue is: Are consumers not getting surprise bills,” says Patricia Kelmar, director of health care campaigns at U.S. Public Interest Research Groups, a national federation of consumer advocacy organizations. “It’s hard to quantify an event like a surprise bill when it isn't even supposed to happen in the first place.”

Compounding observers’ doubts about the law’s efficacy is low consumer awareness of the new protections. In June, only 16% of adults said they had seen, read or heard something about the No Surprises Act, according to the Morning Consult poll. Consumers who don’t know the law also don’t know their rights if providers and insurers fail to comply.

The complexity of the law — primarily in the form of exceptions that permit out-of-network charges and balance billing in some circumstances — raises further questions. “Not everything that patients think is a surprise bill falls under the NSA,” says Loren Adler, associate director of the University of Southern California-Brookings Schaeffer Initiative for Health Policy. Urgent care, for example, doesn’t receive the law’s protections for emergency care.

Is the new law working?

It may be too early to gauge the efficacy of the new consumer protections, and federal agencies aren’t releasing statistics. The Centers for Medicare & Medicaid Services, or CMS, and the Department of Health and Human Services did not respond to requests for data on consumer complaints of violations of the No Surprises Act.

“It’s a little hard to know, but I gather that mistakes are being made from time to time,” says Karen Pollitz, a senior fellow and co-director of the Program on Patient and Consumer Protections at KFF, a health care news and policy organization. “If a mistake is made, it falls to the consumer to figure out what to do next, and that’s not how this should have worked.”

Other observers are satisfied with the law’s overall performance. “The No Surprises Act is working pretty well,” Adler says. “It doesn’t fix every problem in the health care system, and there are a couple remaining sources of surprise bills.”

“The law is a good one, and the administration should continue to roll it out to be fully implemented,” says Kelmar.

How the law is supposed to protect you

The No Surprises Act’s protections are the broadest in the emergency room, where patients are most vulnerable and least able to control whether all of their clinicians are in their insurer’s network.

“Most surprise medical bills are going to involve emergency services,” Pollitz says. “In the ER, there are no exceptions. Everybody who touches you or your imaging is obliged to send their claims first directly to your health plan — before they send you a bill — to find out your in-network cost-sharing amount. If they don’t do that, there’s a fine of $10,000 for each time they screw up.”

Hospitals are also barred from balance billing for post-stabilization care, services provided by any department after a patient receives initial emergency care.

The new law also protects against out-of-network and balance billing for nonemergency care, but with various exceptions. For example, if your in-network primary care physician orders tests from an out-of-network lab, the lab may still balance bill you for the difference between in-network and out-of-network rates.

The No Surprises Act offers different consumer protections if you don’t use insurance. “If you’re paying out of pocket or you don’t have insurance, you’re entitled to get a good-faith estimate in advance,” Kelmar says. “This gives consumers a chance to push back and plan financially for medical treatment.”

If you’re asked to sign a waiver of your rights under the No Surprises Act, think before you agree to what might be unlimited financial liability. If you do sign and later regret it, you may still have recourse. Providers are not permitted to ask patients to waive protections if no in-network provider is available, if there are unexpected urgent medical needs or for certain ancillary services.

What to do if you receive an unexpected bill

What do you make of a provider charge that’s significantly greater than your plan’s in-network coverage? You might need help figuring out what’s behind the charge. “This could be an error, or it could be providers still trying to profit from sending a balance bill,” Kelmar says.

You can try calling CMS’s No Surprises Help Desk at 800-985-3059; the service will tell you how to file a dispute or complaint in any state. Assistance is available in English and other languages. “CMS is supposed to figure out who should resolve each complaint,” Pollitz says.

It’s important to know that CMS has two processes for consumers who disagree with provider bills:

• If you’re using health insurance and believe you’re being charged more than your plan’s in-network rate for doctors or services covered by the No Surprises Act, you can submit a complaint.

• If you’re uninsured or chose not to use your insurance and the provider charged more than $400 over its estimate, you can dispute a bill.

Under the No Surprises Act, your state chose one mode of enforcement:

• Some states enforce the law on their own.

• Other states cede enforcement to federal agencies.

• Still other states collaborate with federal agencies on enforcement.

The No Surprises Help Desk should be able to tell you how enforcement works in your state.

Adler suggests a different starting point: “If you get an unexpected bill from a provider, your first recourse is your insurer; they are at risk of losing their license if they don’t comply.”