Carter Beck –
January 2, 2022

What’s a Surprise Medical Bill?

A surprise medical bill generally occurs when a health plan member receives medical services for which the member did not choose the provider providing the service.  This frequently occurs when receiving emergency services.  The plan member may be taken to a non-participating hospital emergency room, or a plan member may be taken to a participating hospital emergency department, but the ER physicians are non-participating with the member’s health plan.  There are also non-emergency services where surprise billing might result.  These include such things as services provided at a participating hospital by non-participating anesthesiologists, radiologists, pathologists, and other consulting physicians, again whom the plan member has not selected.

In these instances, the plan member will be billed by the provider at the provider’s billed charges and the health plan will assess the member an out of network cost share.  This means that not only will the plan member be required to pay a higher cost share but will also be subject to balance billing from the provider, which amount can be hundreds of dollars to tens of thousands of dollars.

What Does the New Federal No Surprise Act Require?

As part of the coronavirus relief legislation passed in December 2020, Congress created the No Surprise Act (“NSA”) to effectuate protections to millions of Americans who receive unwanted surprise medical bills.  The new law is codified in multiple parts of the Code of Federal Regulations.[1]  The new law took effect on January 1, 2022 (except for one material portion which has been delayed).  The new law applies to health care facilities, providers, group health plans and health insurance issuers offering group or individual health insurance coverage.  The NSA applies to 3 major areas of the health care delivery system:

  • Emergency Medical Services

Not surprisingly, ER services are the biggest area where surprise medical bills occur.  The new law applies to all emergency health care facilities including independent and freestanding emergency rooms and urgent care centers licensed to provide emergency care.  Emergency care as defined in the Act includes both the delivery of emergency medical service and post-stabilization care, whether delivered in the emergency room, an observation setting or inpatient setting.  Once a patient is stable, as determined by his/her treating physician, the Act no longer applies.

  • Non-Emergency Services

The NSA provides protections against out-of-network providers who provide medical services at in-network facilities.  The Act does not apply to out-of-network facilities.  The providers typically at issue have a contract with the hospital/facility and the hospital/facility has a contract with the consumer’s health plan, but the provider does not have a contract with the consumer’s health plan.  Examples of these providers are radiologists, anesthesiologists, pathologists, and neonatologists.

  • Air Ambulance Services

The NSA bars balance billing by air ambulance providers, as many air ambulance providers are not contracted with health plans and are very expensive.  The Act does not apply to land ambulances.

Can a Consumer Consent to Waive the NSA Protections?

The short answer is “yes”.   An exception to the NSA is allowed if a patient agrees to give prior written consent and waive his/her rights to the protections of the NSA.  Waivers are not ever permitted for emergency services and certain other non-emergency services.  The services for which a waiver cannot be given include:

  • Emergency services
  • Unforeseen urgent medical needs arising when non-emergent care is furnished
  • Ancillary services, including items and services related to emergency medicine, anesthesiology, pathology, radiology, and neonatology
  • Items and services provided by assistant surgeons, hospitalists, and intensivists
  • Diagnostic services including radiology and lab services
  • Items and services provided by an out-of-network provider if there is not another in-network provider who can provide the service in a hospital/facility.

The Federal Regulations provide a standardized waiver consent form that includes key requirements and information including:

  • A statement that the patient is not required to waive protections, and can try to find an in-network provider/facility instead (for post-stabilization care, the notice must indicate the name of available in-network providers)
  • A statement that the out-of-network provider/facility can refuse to treat if the patient refuses to waive surprise billing protections
  • A statement that waiving the protections could cost the patient more money in out-of-network charges
  • A description of the out-of-network services to be provided, along with billing codes and a good faith estimate[2] of costs the patient may owe

Providers are cautioned not to seek consent to waive protections from patients who are impaired or otherwise limited in their ability to make informed decisions.  Additionally, the waiver form must be made available in the 15 most common languages in the geographic region where the consent is sought.  If there is not a consent form available in the patient’s language, the services of a qualified interpreter must be provided.  Once consent is given, it can be revoked.  And the out-of-network provider must provide notice to the patient’s insurer that the patient has given consent to waive balance billing protections.

The NSA requires that the consent be given at least 72-hours in advance of the service(s), or if the patient has scheduled the service(s) less than 72-hours in advance, then no later than the day the appointment is made.  For same day services, the NSA permits consent to be given not later than 3-hours in advance.

How Does the NSA Work?

If a health plan member receives medical services from a non-participating provider against which the NSA protects, the member cannot be billed by the provider for any amount except for the member’s in-network cost share based on the ultimate payment amount paid by the insurer.  The provider must bill the patient’s insurance carrier or plan administrator directly.  The insurer/administrator must evaluate the claim, and if the claim is clean, the insurer/administrator must reimburse the provider directly within 30 days. 

The amount of the reimbursement is the most complex part of the law.  The NSA provides that payors must make payment based on an All-Payor model, state law, an agreement between the payor and the provider or resolution by an arbitration through an independent dispute resolution process.  In most cases the payment amount will likely end up being close to the median rate a payor would pay its in-network providers in a geographic area, which under NSA is known as the qualifying payment amount (“QPA”)[3]

Who is Responsible for Enforcement and How Will Enforcement of NSA be Conducted?

There are many challenges to the enforcement provisions of the NSA.  Generally, states will have primary enforcement authority for health plans offering group and individual insured plans.  If a state refuses to enforce or does not have adequate enforcement processes, the federal government, likely HHS and/or CMS, will take over the enforcement.  For private self-funded plans, the US Department of Labor and Department of Treasury will have enforcement authority.   For self-funded plans sponsored by non-federal public employers, the US Department of Health and Human Services will have primary enforcement authority.  Finally, for the Federal Employees Health Benefits Program (FEHBP), enforcement will rest with the US Office of Personnel Management.

Enforcement against providers lies largely with the states, with federal back-up.  The responsible state agencies could include, for example, a state’s office of attorney general, department of health, hospital commission or medical licensing board. 

If violations are found, irrespective of the violator, various penalties can be assessed, including corrective action plans to civil monetary penalties of up to $10,000 per violation.  In the case of a provider violation, a variety of factors can be considered, including the degree of culpability, history and frequency of prior violations, the impact on consumers, and the severity of the violation.  The violation can be waived if the provider does not knowingly violate the NSA and should have not reasonably know it violated the NSA and reimburses any incorrect payments plus interest.  Finally, there is a hardship exemption that can be considered for a civil monetary penalty.

What Can Consumers Do?

Even if compliance with the NSA is anticipated to be high, with over 10 million current surprise medical bills annually, there are likely to be thousands of problems with implementation.  Initially, consumers can appeal decisions to their health plan or administrator.  Second, the NSA requires both providers and insurers/plans to provider requisite notices about the NSA to consumers and the notice must include contact information for the applicable state and/or federal enforcement agency.  Finally, the NSA will establish a national consumer complaint system.  The system is under development and  scheduled to go live on January 1, 2022. [4]


All in all, the NSA is anticipated to be a good move for consumers but will provide a significant burden on providers and plan insurers and administrators.  It remains to be seen how well the implementation of the NSA will proceed and how effectively each party will comply with its own compliance requirements.  And, as with all major health care changes, there will likely be significant implementation costs that will ultimately be passed onto consumers, despite the anticipated savings of millions of dollars to consumers by not having to pay surprise billed charges.

If you have any questions about the NSA or its implementation, please do not hesitate to reach out to your Stall Legal LLC attorneys for assistance.

[1]  Office of Personal Management:  5 CFR Part 890; Department of Treasury: 26 CFR Parts 1 and 54; Department of Labor: 29 CFR Parts 2510 and 2590; Department of Health and Human Services: 45 CFR Parts 144, 147, 149 and 156.

[2] The “good faith estimate” component has been delayed beyond 01/01/2022.

[3]  The QPA has been hotly contested by some providers, especially air ambulance providers who have filed lawsuits urging that the regulations should not create a rebuttable presumption in favor of the QPA.