The No Surprises Act Brings Consumers long-needed Protection

With rare bipartisan support and a nod from President Trump, the new rules take effect in 2022

February 24, 2021 | By Laurie Flynn

Passed by Congress in the tumultuous last days of 2020, the No Surprises Act might itself seem like a surprise given the absence of fanfare that surrounded its approval. Buried in the $900 billion federal coronavirus relief bill, the new law banning surprise medical charges is a huge win for consumers considering the powerful interests that fought hard to defeat it.

The law comes as a third of Americans say they’ve received a surprise medical bill in recent years, at no fault of their own, usually because they lacked health insurance or received emergency treatment from an out-of-network provider. Such bills sometimes occur when an in-network hospital employs out-of-network doctors. In all these cases, patients rarely know in advance the amount they will be billed. A medical helicopter transport might leave an unsuspecting patient holding the bag for $50,000 or far more.

Kevin A. Schulman, faculty of the Stanford Clinical Excellence Research Center and a professor of

medicine and economics, applauded the new law as a good first step toward protecting consumers who’ve struggled with surprise medical bills for far too long.  “Here at CERC we’ve been looking at the rise of surprise medical bills and their impact on consumers and health insurance premiums for some time, and the No Surprises Act is the first national attempt at addressing this festering issue,” said Schulman.

Under the new rules, doctors and hospitals can’t charge patients fees on most out-of-network care that their insurers won’t cover, and patients’ financial responsibility for emergency care from such providers is limited. Patients are liable only for their in-network cost-sharing amount, rather than a local benchmark rate, and providers and insurers can negotiate reimbursement. In what some are calling a win for private equity firms and other healthcare investors, the law includes an arbitration process for disputes between insurers and providers that ensures higher payouts than what would otherwise have been available to them.

The nearly two-year battle for No Surprises was waged largely behind the scenes. Private-equity firms, which owned many of the medical providers that deliver surprise bills, spent millions on ads opposing it, at times describing it as a blow to hospital emergency rooms at the frontlines of Covid-19 treatment. Powerful members of Congress got pressure from stakeholders in their districts.

“"No family should be blindsided by outrageous medical bills, Trump said in May 2019, shortly before the bill was introduced.

But in a rare showing of bipartisan support, the bill passed by a large margin, enjoying the backing of President Trump. “No family should be blindsided by outrageous medical bills,” Trump said in May 2019, shortly before the bill was introduced.

Signed into law on December 27, 2020, the bill is scheduled to take effect in 2022, but with one notable major exception for now: ground ambulance transport. Although they have the highest out-of-network billing rate, ground ambulances, with their complex array of private and public providers, may have been too much at once for legislators already facing a tough fight.

Also a disappointment to many was the new law’s reliance on arbitration, which Schulman said could be an expensive and time-consuming process to administer. “We’ll have to watch how that plays out,” Schulman said. “But for the first time, at least the consumer is protected from these disputes.”

Writing in Health Affairs in July 2019, Schulman, along with CERC executive director Arnold Milstein and visiting scholar Barak Richman, urged lawmakers to take action.  “Surprise bills indeed inflict enormous harm on non-affluent Americans, and Congress deserves credit for prioritizing a solution,” they wrote.