New Guidance on the No Surprises Act

The No Surprises Act, which went into effect on January 1, 2022, is intended to shield consumers from the financial hardships caused by unreasonably high healthcare expenses. The law specifically addresses the long-standing practice in which out-of-network medical providers, ranging from doctors to air ambulance companies, bill patients for the amounts their insurer did not cover.

While balance billing has long been prohibited in both Medicare and Medicaid, the federal No Surprises Act extends similar protections to individuals insured through employer-sponsored and commercial health plans.

Under the law, consumers will not receive balance bills when they seek emergency care, when they are transported by an air ambulance, or when they receive non-emergency care at an in-network hospital but are unknowingly treated by an out-of-network physician or laboratory. This means patients will pay deductible and copayment amounts equivalent to in-network rates.

In addition, medical providers may not hold patients responsible for the difference between those amounts and the higher fees they wish to charge. Instead, those providers are required to negotiate acceptable payments with insurers per a provider-patient bill dispute resolution process established by the Department of Health and Human Services (HHS).

Since the law was first enacted, the Biden administration has issued several interim rules and guidance. Here is a summary of the latest information on how to implement the No Surprises Act from Health Affairs, a respected non-partisan journal of health policy research.

Scope and Estimates

  • The No Surprises Act is limited to emergency care, some post-stabilization care after an emergency and some types of non-emergency services at in-network facilities (unless a patient consents to treatment by an out-of-network provider).
  • Healthcare providers and facilities are banned from sending balance bills to patients to collect a higher amount.
  • The requirement to provide patients a good faith estimate of expected charges generally applies to all providers, even if they don’t provide care related to a healthcare facility or emergency facility.

Dispute Resolution Process

  • The No Surprises Act includes an independent dispute resolution (IDR) process to resolve payment disputes between payers and out-of-network providers, and can be initiated only if the parties are unable to negotiate a payment rate among themselves.
  • The law uses “baseball-style” arbitration in which each party offers a payment amount, and the IDR entity selects one amount or the other with no ability to split the difference. The decision is binding, although the parties can negotiate or settle.
  • Federal officials are responsible for certifying IDR entities that can administer the IDR process on a nationwide basis.

Qualifying Payment Amount

  • The qualifying payment amount (QPA) is defined as the median of all a plan or insurer’s contract rates from January 31, 2019 (for a certain item or service in that geographic region) increased for inflation.
  • Per Internal Revenue Service guidance, the QPA for 2022 is about 6.5 percent. For example, if the median contracted rate for a certain service was $12,480 as of January 31, 2019, the QPA for the same service provided in 2022 would be $13,289.

Enforcement Letters

  • The HHS addresses enforcement letters to governors and insurance commissioners that explain each state’s role in enforcing new federal protections on insurers and providers.
  • The enforcement letters also address whether the state has a specified law, or will use the federal IDR process, to resolve out-of-network payment disputes.

External Review

  • Federal and state external review processes are available to dispute determinations over whether a plan or insurer complied with the No Surprises Act’s protections.
  • States that do minimum federal standards for dispute resolution must implement an effective federal external review process. States can refer issues to the federal external review process, and plans and insurers can opt to use an independent review organization.

Notice and Consent Forms

  • Patients can never be asked to waive their protections under the No Surprises Act for emergency care.
  • There are limited circumstances when patients can knowingly agree to use certain types of out-of-network providers for non-emergency care. Those who waive their protections agree to pay full billed charges.
  • Even in non-emergency settings, providers cannot ask a patient to waive their protections 1) if there is no in-network provider; 2) for unforeseen, urgent medical needs; or 3) for ancillary services (i.e., such as care related to emergency medicine, anesthesiology, pathology, radiology, and neonatology).

Uninsured and Self-Pay Patients

  • The No Surprises Act requires good faith estimates for insured, uninsured and self-pay patients that reflect true expected charges, or the amount that would be charged to a plan or insurer.
  • Uninsured or self-pay patients may challenge a bill from a provider or facility if the billed charges substantially exceed the expected charges in a good faith estimate.
  • The dispute resolution process for uninsured or self-pay patients can be used when the billed charges are at least $400 more than the expected charges listed on the good faith estimate for a specific provider.

Debt Collection

  • Per the Consumer Financial Protection Bureau, existing consumer protection laws (such as the Fair Debt Collection Practices Act and Fair Credit Reporting Act) apply when collecting, furnishing information about and reporting medical debts covered by the No Surprises Act.
  • For example, debt collectors cannot misrepresent to a consumer that they must pay a debt from a charge that exceeds the amount permitted under the No Surprises Act or collect an amount that exceeds what is owed.

Although the No Surprises Act went into effect last January, federal officials continue to issue new guidance and policies to address the legislation’s complexities. For more information, please visit:


Pacific Federal is a Zenith American company and subsidiary of Harbour Benefit Holdings, Inc.