Have you ever opened up a bill from your doctor or a hospital, only to find out you owe much more money than you thought you would? It’s a common experience, and it’s not usually a welcome one. But, it’s one that’s about to change in a few key ways.
In 2022, a new U.S. law called the No Surprises Act is going into effect. It has a few main goals, like making your medical bills easier to understand and keeping unexpected charges off those bills. To give you a better idea about how this law could change your medical care, we’re taking a look into some important details of the No Surprises Act.
Understanding Surprise Medical Bills
On January 1 of 2022, the No Surprises Act goes into effect. This new law aims to keep patients from getting surprise medical bills after they’ve received a few different types of medical care. A surprise medical bill is also called a balance bill.
When you get medical care and have health insurance, the doctor’s office, clinic or hospital where you got the care sends a bill to your health insurance company. Then, your health insurance company pays that bill to cover the cost of your care. Sometimes, though, a healthcare provider might send a bill to your insurance company that your insurer won’t pay for. Or, the insurer might not pay the whole cost of the bill. When this happens, you can end up getting charged for the amount your insurance company didn’t cover. This is a “surprise bill” — you’ll probably be surprised to find out you owe money.
Often, surprise billing happens after you see an out-of-network doctor. Health insurance companies sign contracts saying they’ll work with specific groups of healthcare providers and hospitals. These groups are called networks. Providers are called “in-network” when they have a contract to work with your health insurance company. A doctor or hospital that doesn’t have a contract to work with your insurance is called an out-of-network provider.
So, why do networks matter? When in-network providers and health insurance companies agree to work together, they also agree to set lower prices for services your plan covers. Out-of-network doctors don’t have these agreements. That means they can charge your insurance company more money than an in-network doctor would for the same service.
Say you see an in-network provider to get an X-ray. Your health insurance company and the provider already agreed that the price is $100. This means you get your X-ray and the doctor’s office bills your insurance company $100. Your insurance company then pays the $100 to the office. You don’t owe anything.
Now, say you visit an out-of-network doctor for an X-ray. They don’t have a price agreement with your insurance company. So, they bill your insurer their $200 price for the X-ray. Your insurer is only willing to pay the $100 rate. Your insurance company covers $100 of the $200 bill. But, the out-of-network provider still needs another $100 to cover the cost of your X-ray. The doctor’s office sends you a bill for the remaining $100. This is a surprise bill, or balance bill. You might have thought your health insurance would cover the full costs of your X-ray, but it didn’t. Now you’re expected to pay, even though you weren’t planning to. This is the type of situation the No Surprises Act aims to prevent.
What’s Included in the No Surprises Act?
The No Surprises Act keeps you from getting surprise bills from out-of-network providers in certain cases. When the law goes into effect, it will become illegal for healthcare providers to charge you anything more than you’d normally pay for in-network services. As long as you didn’t know a provider was out of network or you didn’t choose the out-of-network provider yourself, you won’t get surprise bills for care they gave you.
Sometimes, you might not be able to agree to get care or choose a doctor yourself. This can happen when you need emergency medical care. You might have to get to the closest hospital, and it might not be in your insurance company’s network. So, you might end up getting surprise bills later on. The No Surprises Act bans surprise billing for emergency care. Instead, the out-of-network hospital or doctor must accept your insurance company’s in-network rate as payment.
You might also get a surprise bill if you get care at a hospital that’s in your insurance network — but the doctor who provides that care happens to be out of network. The out-of-network doctor could still charge you a higher rate than your insurance agreed to pay. Under the No Surprises Act, you’ll no longer be liable for paying the out-of-network cost if you get care this way. Instead, you’ll pay what you would if you were getting care from an in-network doctor.
How Else Will the No Surprises Act Change Your Medical Care?
In addition to changing how you and your health insurance company are billed for medical care you get, the No Surprises Act will also change how you manage your medical bills and care costs. When the act goes into effect, you may start getting what are called good faith estimates. A good faith estimate is a document that outlines what you’ll be expected to pay for a medical service if you don’t have health insurance. If you do have health insurance, you’ll get a similar document called an explanation of benefits (EOB). An EOB tells you the cost of a service, the amount your health insurance will pay for it and the amount you’ll owe. Each time you make an appointment with a doctor, they’ll send you this paperwork to show you a rough idea of what you may need to pay. This helps you understand costs if you need to pay out of pocket. And that eliminates surprises. Good faith estimates can also help you shop around to find doctors that are more affordable.
The No Surprises Act also outlines what to do if a provider charges you more than the amount on your EOB or good faith estimate. If you disagree with the charges, you can open a dispute. A third-party reviewer will look over your case and figure out if a provider charged you the wrong amount. You’ll also be able to start a similar dispute process if your health insurance won’t cover care that you need. This means that, even if you do get a surprise bill, you can take steps that are in your best financial and medical interest.
- “No Surprises Act of the 2021 Consolidated Appropriations Act” via the U.S. Federal Trade Commission (FTC)
- “Balance Billing – Surprise Bills” via the Centers for Medicare & Medicaid Services (CMS)
- “What are the new protections [of the No Surprises Act]?” via the Centers for Medicare & Medicaid Services (CMS)
- “FAQs About Affordable Care Act and Consolidated Appropriations Act, 2021” via the Centers for Medicare & Medicaid Services (CMS)
- “Understanding Costs in Advance” via the Centers for Medicare & Medicaid Services (CMS)