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The No Surprises Act, which protects privately insured patients from surprise medical bills, goes into effect on Jan 1. Drazen/Getty Images
  • On Jan. 1, 2022, Americans will be protected from receiving surprise medical bills under the No Surprises Act.
  • Surprise medical bills occur when a patient sees an out-of-network provider through no fault of their own.
  • Insurers and providers will negotiate balance bills, effectively leaving patients out of the middle.

Beginning Jan. 1, 2022, a new law will take effect that ends surprise medical bills for insured people receiving emergency medical care and other health services in the United States.

Congress passed the No Surprises Act last December with bipartisan support, establishing new federal protections against surprise medical bills.

But what types of medical bills are covered under the law, how does it protect consumers, and will it affect overall healthcare costs and premiums?

Healthline spoke with two healthcare policy experts to shed some light on these questions.

The No Surprises Act defines surprise medical in a specific context.

“This is important because there are numerous situations that can be surprising but don’t fall into this official bucket of surprise medical bills,” said Jack Hoadley, PhD, research professor emeritus in the Health Policy Institute of Georgetown University’s McCourt School of Public Policy.

These situations may include not being aware that your health insurance plan has a high deductible or that a certain procedure costs so much.

While such bills can certainly be surprising, they are not covered under the No Surprises Act.

“When we talk about surprise medical bills for the purposes of the No Surprises Act, it means situations where you end up using an out-of-network healthcare facility or healthcare provider, generally, through no fault of your own,” Hoadley explained.

This most commonly occurs in emergency situations.

If an ambulance brings you to a hospital that is out of network, for example, you may receive a costly surprise medical bill for the services performed.

“That’s not something you chose,” Hoadley said. “You got to whatever hospital you were taken to.”

Even in hospitals that are in your insurance plan’s network, there are situations in which a doctor who sees you is out of network. This can happen during an urgent or elective procedure.

“So even if you’ve done your due diligence and pick an in-network facility and picked an in-network surgeon to do your procedure or an in-network obstetrician to deliver your baby, while you’re there, you can also be treated by an out-of-network anesthesiologist, or radiologist, or a cardiologist,” Hoadley said. “And again, it’s not something you were told about or could control.”

The result of these scenarios is often a surprise bill asking people to pay the “balance bill,” or the difference between what the insurance company paid and the total charged.

Research has found 1 in 5 inpatient emergency department cases may lead to surprise medical bills.

Studies show surprise medical bills average more than $1,200 for anesthesia, $2,600 for surgical assistants, and $750 for childbirth.

The No Surprises Act ensures privately insured patients will pay no more than the in-network rate when treated at out-of-network facilities or by out-of-network healthcare professionals without their consent.

“On January 1, patients will be protected from surprise medical bills in emergency cases, nonelective emergency cases, and air ambulances,” said Christopher Garmon, PhD, assistant professor of health administration at the Henry W. Bloch School of Management at the University of Missouri–Kansas City.

Currently, the law does not cover ground ambulances, but it has created an advisory committee to develop recommendations related to disclosure of charges, surprise-billing protections, and enforcement mechanisms.

People can still opt to be treated by out-of-network healthcare professionals and facilities for elective procedures, but the new law stipulates that they must be told ahead of time and consent.

The No Surprises Act also establishes a procedure for how balance bills will be handled between providers and insurers.

The two will negotiate pricing, and if a solution can’t be reached, an independent arbiter will be brought in to determine a fair reimbursement.

“Importantly, the patient is completely taken out of the middle,” Garmon said.

In September, a new rule from the Biden administration providing more details on how out-of-network balance bills are to be settled under the No Surprises Act has garnered much criticism, particularly among physician and hospital groups.

According to the rule, when a dispute goes to arbitration, the arbiter must begin with the presumption that the qualifying payment amount (defined as the median in-network rate for similar services provided in an area) is what’s appropriate to pay for out-of-network care.

Other factors may be considered as well, such as healthcare professional experience, the type of hospital, and complexity of care, but are not given equal weight.

Several healthcare professional organizations, including the American Hospital Association and the American Medical Association, have filed lawsuits, stating this rule gives insurers an unfair advantage.

Some have also raised concerns that the No Surprises Act will lead to an increase in healthcare premiums.

Garmon said he doesn’t think this is likely. In fact, the Congressional Budget Office estimates that the No Surprises Act is set up to reduce premium growth by 0.5 to 1 percent in most years.

“I think that that’s a good, reasonable estimate,” Garmon said.

Hoadley said it might swing either way, depending on how in-network negotiations go in the future.

“When an insurance company negotiates with a group of anesthesiologists, for example, over what their fees should be in the insurance plan for the in-network doctors, this new set of rules will cast some shadow on that negotiation,” he said. “It could lead to lower rates, which would actually help on premiums, or they could lead to higher rates, which could raise premiums.”

However, he doesn’t anticipate the impact to be that great either way.

“We’re probably talking about a 1 percentage point swing one direction or the other,” he said.

While the No Surprises Act is meant to stop the issuance of surprise medical bills to patients, if you do receive one after Jan. 1, there are some steps you can take to rectify it.

“We do expect there will be some of those situations,” Hoadley said. “It may take some time for insurers, providers, and facilities to understand the new rules and get it right.”

The first step, Hoadley recommends, is to contact your health insurance company.

“When you receive your explanation of benefits, it will tell you how much you’re liable to pay and how much the policy is paying, and then you can compare that with the bill you got from the medical facility, and see whether you’re getting billed for more than you should be,” he said.

Finally, under the new law, a complaint line and website operated by the Department of Health and Human Services will be set up for people who believe they have been wrongly issued a surprise medical bill.

The toll-free number for the No Surprises Help Desk will be 800-985-3059. The line goes live Jan. 1.