While the No Surprises Act (NSA) aims to protect patients from unexpected medical bills, it has created substantial financial and administrative challenges for hospitals and healthcare systems nationwide. Since its implementation on January 1, 2022, healthcare providers have faced mounting compliance costs, complex dispute resolution processes, and significant revenue disruptions. In fact, providers have seen nearly a 40% decrease in reimbursements since the law took effect. Let’s examine this well-intentioned legislation that’s creating a perfect storm of administrative and financial burden for already strained healthcare providers.
What Is the No Surprises Act?
The No Surprises Act is federal legislation designed to protect consumers from surprise medical bills that can occur when patients unknowingly receive care from out-of-network providers. Enacted as part of the Consolidated Appropriations Act of 2021, the NSA establishes new billing protections for patients in several key scenarios:
- Emergency services, regardless of whether the facility or provider is in-network
- Non-emergency care from out-of-network providers at in-network facilities
- Air ambulance services from out-of-network providers
Under these new protections, patients are only responsible for their in-network cost-sharing amounts—copayments, coinsurance, or deductibles—when receiving care in these situations. Healthcare providers are prohibited from billing patients for any additional amounts beyond these in-network rates.
The legislation also introduces other consumer protections, including requirements for:
- Good faith estimates for uninsured or self-pay patients
- Updates to health insurance ID cards with clearer cost information
- More accurate provider directories
- Price comparison tools to help patients understand potential costs
- Continuity of care when providers leave a network
Why Was the No Surprises Act Created?
Before the NSA, if patients received care from out-of-network providers—even unknowingly—their health plans typically wouldn’t cover the entire cost. This left many patients with significantly higher bills than if they had been treated by in-network providers.
This scenario was especially common in emergency situations where patients had little to no choice in selecting their providers. Even at in-network facilities, patients might receive care from out-of-network specialists, such as anesthesiologists, radiologists, or pathologists.
In these cases, out-of-network providers could bill patients for the difference between their charges and what the patient’s health plan paid—a practice known as “balance billing.” When unexpected, these bills are referred to as “surprise bills,” often leaving patients with substantial financial burdens.
The NSA was created with the objective of protecting consumers from these unexpected financial obligations, improving transparency in healthcare costs, and ensuring patients could make more informed decisions about their care without fear of receiving surprise bills.
Impacts on Hospitals and Healthcare Providers
While the NSA has provided some protection for patients against the most egregious surprise bills, most patients remain unaware of their NSA protections, creating potential satisfaction challenges during registration, financial counseling, and billing processes. These notable awareness gaps, plus inconsistent implementation, still leave many patients vulnerable to unexpected healthcare costs. Meanwhile, the NSA has created significant financial and administrative challenges for healthcare providers:
Financial Impacts and Payment Disputes: The NSA establishes an Independent Dispute Resolution (IDR) process to resolve payment disagreements between providers and insurers. However, this system has faced substantial issues:
- A massive backlog of claims has developed, with HHS receiving over 90,000 claims in just the first five and a half months—far exceeding initial annual estimates
- Providers have reported that the IDR process often favors payers, potentially leading to reduced reimbursement rates
- Administrative fees for dispute resolution increased by 600% at one point (though later reduced following legal challenges)
- The process consumes valuable administrative resources and creates cash flow challenges due to delayed payments
Legal Challenges: The implementation of the NSA has been fraught with legal battles. The Texas Medical Association alone has filed four lawsuits challenging various aspects of the legislation:
- The fairness of the dispute resolution process
- The “outsized weight” given to qualifying payment amounts
- Rules that “artificially deflate” qualifying payment amounts
- A 600% increase in administrative fees for dispute resolution
Several of these lawsuits have been successful, with federal courts ruling that certain aspects of the NSA implementation unfairly favor payers over providers.
Compliance Burden: Healthcare organizations face significant operational challenges in complying with the NSA:
- Providing good faith estimates to uninsured or self-pay patients
- Updating processes to prevent balance billing in applicable situations
- Managing increased administrative work related to the IDR process
- Responding to complaints and investigations
According to recent CMS data, most NSA-related complaints (10,300 out of 12,077) have been made against providers and facilities, with the most common issues being surprise billing for non-emergency services at in-network facilities, surprise billing for emergency services, and good faith estimate concerns. Each complaint investigation consumes additional provider resources, compounding the administrative burden.
What Can Providers Do?
While legislative improvements are on the horizon—such as the December 2024 bill introduced by Senators Roger Marshall and Michael Bennet to close enforcement gaps—providers need immediate strategies to protect their financial health under the NSA. Steps to consider include:
- Developing robust appeal processes with dedicated teams that understand the nuances of the IDR system
- Implementing comprehensive staff training programs focused specifically on NSA compliance requirements
- Establishing clear protocols for quickly identifying and resolving potential NSA situations before they escalate to formal complaints
Many hospitals lack the administrative resources and experience to take these steps. As the No Surprises Act continues to evolve through legal challenges and legislative updates, hospitals and healthcare systems should consider experienced partners who understand the complexities of the NSA and can tackle the issues with advanced artificial intelligence (AI) technology along with a dedicated team of experts. Reliable and knowledgeable vendor partners like Aspirion can help hospitals recover more revenue in this new landscape, as well as reduce the burden on hospital staff so they can go back to working at the top of their license.
Ready to explore how Aspirion’s AI platform—plus its powerhouse team of attorneys, data scientists, and clinicians—can help you navigate NSA compliance while maximizing your revenue? Let’s talk about your specific RCM needs and challenges. Contact us today!
