No Surprises Act Protects Against Balance Billing

Help your clients save using Reference Based Pricing

By Christine Cooper

More than a year ago, the U.S. healthcare system marked a turning point with the passage of the
No Surprises Act (NSA) to address concerns about “balance billing.” The NSA applies to participants in employer-sponsored health plans and is intended to protect them from “surprise” bills for certain emergency services and care received from out-of-network providers at in-network facilities.   

To address complex issues surrounding NSA, clients may call upon their health insurance brokers to provide strategic guidance that empowers them to respond to some of the challenges. As with Health Reform, most plan sponsors amended their plans to comply with the NSA. A “compliance only” approach adds to administrative burdens and increases the cost of coverage by treating certain out-of-network expenses as if incurred in-network. While most failed to strategically address NSA, brokers now have an opportunity to identify the impact of NSA compliance and prompt consideration of the most effective plan design that fulfills the requirements of the NSA and Transparency in Coverage Final Rule to create a competitive advantage. 

Following are relevant insights about the NSA and some options to enhance engagement, lower risk, reduce costs and achieve savings.

What Brokers Need to Know about the NSA

What is or is not an emergency bill under the NSA?

The definition of emergency services was expanded by the NSA to include pre-stabilization services provided after the patient leaves the emergency department and is admitted to a hospital.

For services in an emergency department of a hospital or an independent freestanding emergency department, a plan cannot limit services for emergency medical conditions solely on the basis of diagnosis codes — for example, ignoring symptoms presented by the patient.

Brokers will want to ensure that coverage does not impose any administrative requirement or limitation on coverage for emergency services received from nonparticipating providers and  emergency facilities that is more restrictive than those applied to network providers or  emergency facilities.

Brokers will also want to review the status of urgent care center contracts. NSA expands the protections to include emergency services provided at an Independent Freestanding Emergency Department or urgent care center permitted/licensed by the state to provide emergency services.

When does post-stabilization care become emergency services under the NSA?

 Post-stabilization services are considered emergency services under the NSA unless the following are met:

  • The attending emergency physician or treating provider determines that the patient can travel using nonmedical or non-emergency transportation to an available participating provider or facility located within a reasonable distance based on the patient’s medical condition. Unreasonable travel burdens include barriers such as the ability to pay for a taxi, access to a car, safely taking public transit, or the availability of public transit. 


  • The provider and facility must satisfy notice and consent criteria. The patient must be in condition to receive notice and provide consent as determined by the attending physician or treating provider. 

 Can in-network primary care physicians order tests from an out-of-network lab?

 NSA protections apply to lab tests rendered in connection with emergency services at an in-network facility. This creates an additional hurdle for laboratories that generally are not privy to the specific context in which a test was ordered. Should a lab test be performed as part of an emergency service, regardless of whether the treating facility or provider is in-network, the laboratory is prohibited from “balance billing” the patient more than the in-network amount.

What is or is not a health care facility for purposes of the NSA?

The NSA broadly define facilities as inpatient hospitals, critical access hospitals, hospital outpatient departments, and ambulatory surgery centers. Some state statutes also include skilled nursing facilities, infusion centers, and dialysis centers, among other sites, or include other services like diagnostic imaging or laboratory services. At least two state laws also extend surprise billing protections to services delivered in physician offices or other outpatient settings. NSA also adds protections where state laws were not comprehensive, such as for facilities omitted from certain state laws (like critical access hospitals in Nevada) and excluded medical services (such as nonsurgical, nonemergency services provided in Virginia facilities).

NSA Adds an Independent Dispute Resolution (IDR) Process for Providers and Payers

In the first six months, the IDR process got off to a rocky start as the number of disputed claims submitted was nearly five times the anticipated annual estimate — and only one in 30 of those claims was resolved. Further, litigation challenged certain aspects of the IDR process. On Feb. 10, 2023, HHS announced a temporary halt to reimbursement decisions under the NSA pending review of a court ruling that ruled the IDR regulations unfairly favored payers. HHS later clarified that determinations may be made for all claims with a date of service of October 25, 2022 and earlier.

Participants Don’t Distinguish Between “Surprise” and “Unexpected” Bills

Participants broadly define “surprise” when it comes to medical bills — beyond the “balance bill” for charges by an out-of-network provider. Data compiled by the Health Care Cost Institute confirms that in 2017, about 16% of emergencies included a “balance bill.” Otherwise, only a small percentage of balance bills would be covered under the NSA. Yet, 16% of insured adults ages 18-64 say they have received a “surprise” bill related to care received from an out-of-network provider. And one-third of insured adults ages 18-64 say there has been a time in the past two years when they received an “unexpected” medical bill.

So, clearly, “surprise” ≠ “unexpected.” Brokers can offer solutions that reduce both!

“Real World” Example:  Problem/Solution

“Surprise” would include “balance bills” for emergencies — from out-of-network providers. “Surprise” would also include services from out-of-network providers (anesthesiologists) at in-network facilities (hospitals). For comparison, “unexpected” includes a “balance bill” for regular point of purchase cost sharing (deductibles, copayments, coinsurance, etc.) that the participant wasn’t financially prepared to pay. “Unexpected” also includes “balance bills” for services provided by out-of-network providers in their offices or at out-of-network facilities.

What Brokers Need to Provide and Discuss with their Clients

Finding the right balance between a benefit package that is both adequate and affordable yet financially sustainable has never been easy, but is especially challenging given these new government policies, regulations and economic conditions.

Brokers should take a holistic approach to their client’s plan design suggesting changes that ensure that the plan complies with the NSA yet strategically benefits both the plan sponsor and the ‘health and wealth’ of plan participants.

Reference Based Pricing: Strategic, Compliant Approach to NSA

The best response to the NSA is an approach that is both strategic and compliance oriented. Reference Based Pricing (RBP) is one of the fastest growing solutions in health benefits cost management to avoid unreasonable or excessive provider charges — potentially lowering the cost of coverage and employee point-of-purchase cost sharing.

RBP should be in the broker “wheelhouse” since cost-containment is always a major issue for employers. RBP typically uses Medicare pricing multiples as a benchmark to establish reasonable payments for services to providers. Broadly, this creates a ceiling for payments and establishes a standard of integrity and transparency for service payments.

Brokers and third-party administrators (TPAs) will want to adopt RBP features that prioritize the patient. Providers are likely to attempt to ameliorate the reduction in charges billed by joining networks. And, because more expenses will be paid on an in-network basis due to NSA, sponsors will experience  an increase in those in-network costs. Participants don’t avoid this added expense — it will present itself as increases in employee contributions.

Because the NSA does not apply to the initial payment to a provider, RBP continues to be a valid cost containment strategy. The NSA will likely increase interest in “pure” RBP models that eliminate the need for a network because they often eliminate excessive charges shouldered by employers and employees — from today’s out-of-network and in-network providers.

The expected increases in fixed costs to patients can be offset by emphasizing a RBP model that negotiates billed charges on a per-item basis. Providing patients with a strong repricing mechanism will further empower the transparency and protection afforded to them by the NSA.

Adoption of a “pure” RBP plan enhances health plan’s understanding of their rights under the NSA legislation and price transparency mandates designed to reveal the true cost of provider health services before receiving care and submitting a claim. RBP plans that do not contract with providers should remain unaffected by NSA because there are neither out-of-network claims nor is there any determination of a median in-network rate. A “pure” RBP structure may avoid unreasonable or excessive provider charges — potentially lowering both the cost of coverage and employee point of purchase cost sharing.

Transparency in Coverage

Transparency in Coverage requires insurers and plans to disclose negotiated rates for in and out-of-network rate history and drug pricing information. The goals are the same in terms of prompting healthcare consumerism — ensuring participants have access to the information necessary to incorporate financial criteria into their decisions regarding medical services.

Disciplined use of medical services is the “Holy Grail” of consumerism. Plans that encourage and empower participants to take a consumerism approach put employees in the “driver’s seat.”

One part of the NSA transparency rule that would empower participants to be informed healthcare consumers is the Advanced EOB requirement, part of the NSA transparency rule. Because guidance has yet to be issued, the Advanced EOB is not required at this time. But “done right,” the Advanced EOB would likely be the most effective prompt of consumerism — as it would provide participants options for reducing their out-of-pocket expense, in turn lowering the cost to the plan. 

Nothing stops brokers and TPAs from introducing the Advanced EOB on a voluntary basis before regulations are issued.

Brokers can Support Successful NSA Compliance and More

  1.     Confirm the TPA services meet NSA requirements for claims administration.  
  1.     Confirm the TPA services meet the NSA requirements for IDR processing. 
  1.     Suggest participant communications that differentiate between “surprise” and “emergency” and confirm how RBP is designed to benefit participants — both in terms of their out-of-pocket costs, but, over time, in moderating increases in employee contributions. 
  1.     Ensure RBP is “done right” by prompting plan sponsors and TPAs to incorporate representation services for participants who receive a “balance bill.” 
  1.     Identify TPAs who are interested in innovating by introducing an Advanced EOB, now, prior to regulatory guidance — and incorporating it into the plan sponsor’s consumerism strategy.

RBP “done right” minimizes NSA compliance via a strategic response that will reduce health care costs for both the plan sponsor and participants, today and tomorrow.  

Christine Cooper is the CEO of aequum LLC and the Co-Managing Member of Koehler Fitzgerald LLC, a law firm with a national practice.
Christine leads the firm’s health care practice and is dedicated to assisting and defending plans and patients.