No Surprises Act Protects Patients but Creates Uncertainty for Providers

The No Surprises Act (NSA) took effect on New Year’s Day with what might be seen as a resolution to enhance consumer protection related to healthcare costs. The NSA targets out-of-pocket expenses for emergency and non-emergency out-of-network service costs.

Per the Congressional Budget Office, the NSA “prohibits insurance companies and providers from billing a patient more than the applicable in-network, cost-sharing amount if the patient received care in an emergency situation or in a non-emergency situation where the patient did not have the option to choose an in-network provider.”

Effective immediately, out-of-network billings are to be determined through open negotiation between the health plan and the provider. In situations where the out-of-network provider is not satisfied with the health plan’s payment offer, the NSA provides for an independent dispute resolution process for determining the amount the health plan is obligated to pay for the out-of-network service.

The NSA appears to be a major win for consumers, in particular when faced with critical emergency care.

Meanwhile, health plans and providers could face increased costs to implement the NSA provisions, while providers could see a decrease in revenue for out-of-network services.

Additionally, if payment disputes become commonplace, this could significantly increase costs for both health plans and providers — the NSA states that the party whose offer is not chosen is responsible for all arbitration fees. If a settlement is reached prior to the arbiter’s determination, both parties are responsible for paying 50% of the arbitration costs.

Health plans and providers should begin to carefully analyze the potential impact the NSA will have on revenue and cost projections. Further, providers should consider how the NSA will impact the collectability of receivable balances because it calls for the liability for certain out-of-network services to shift from the customer to the health plan. Marcum’s healthcare-focused professionals are available to assist in these analyses as appropriate and to offer greater clarity into the potential impact the NSA might have on operations during the rest of 2022.