Top 7 No Surprises Act Billing Rules for U.S. Private Practices

What Is the Federal No Surprise Act?

The No Surprises Act is a piece of federal legislation that was implemented on January 1, 2022, with the purpose of protecting patients from unexpected medical costs, especially when they unintentionally receive care. From out-of-network providers. In essence, if your private practice offers services to patients with private health insurance, you are prohibited from charging patients more than their in-network cost-sharing amounts in specific surprise billing situations.

Consequently, insurance companies are required to treat out-of-network claims in those instances as if they were in-network, and billing the patient for any remaining balance is not allowed. These billing regulations under the No Surprises Act apply to the majority of commercial health plans, including both employer-sponsored and individual plans, and encompass a variety of scenarios outlined below. (Patients enrolled in Medicare, Medicaid, TRICARE, or other federal programs already benefit from protections and are exempt from surprise billing.)

What Are the Rules for Private Practices to Avoid Surprise Billing Penalties?

According to the regulations of the No Surprises Act, healthcare providers and insurers must settle payment disputes independently, ensuring that patients are not involved in the process. The law established an Independent Dispute Resolution (IDR) mechanism for providers and health plans to negotiate and arbitrate fair compensation for out-of-network services when necessary. In the interim, patients are solely responsible for their typical in-network copayment, coinsurance, or deductible amounts under protected conditions. Failure to adhere to these requirements could result in federal fines of as much as $10,000 for each infraction for providers, highlighting the importance for small practices to understand the regulations and implement compliant billing practices.

For a comprehensive guide on establishing compliant and efficient medical billing processes, please refer to our Fundamentals of Medical Billing Complete Guide.

Below, we outline the essential elements of the No Surprises Act billing regulations, detailing when surprise billing protections are applicable, the nature of Good Faith Estimates (GFEs) and the new dispute resolution processes, the notifications required for patients, and the means to ensure compliance. These guidelines are designed to assist independent physician practices and clinics in adjusting to the federal No Surprise billing compliance and in preventing costly errors.

Protections Against Surprise Billing in Emergencies

A fundamental component of the No Surprises Act billing regulations is the elimination of surprise bills for emergency services. If a patient presents at an emergency department or an urgent care center (which is licensed for emergency care) and your practice or physicians deliver care that is out-of-network, you are prohibited from billing the patient beyond their usual in-network cost share for those emergency services. The health plan of the patient must provide coverage for emergency care as though it were in-network, irrespective of the inclusion of the hospital or physicians in the network, and the maximum amount that may be collected from the patient is their copayment or deductible. This regulation also applies to air ambulance transports (air ambulances are not permitted to charge patients more than in-network cost-sharing). However, ground ambulances are not included under the federal law and may still lead to balance bills (ground ambulance billing is being addressed separately, outside the scope of this Act).

Emergency services encompass the initial treatment provided in the emergency room or urgent care, as well as specific post-stabilization care. Post-stabilization services, which refer to the continued care following an emergency until the patient is stable enough for transfer or discharge, are typically classified as emergency services under legal guidelines until the patient has stabilized and has given written consent for transfer or out-of-network care. Practically speaking, if one of your physicians is out-of-network and provides treatment to a patient in the emergency room (or is consulted for inpatient care immediately after an emergency), you are required to bill the patient’s insurance and accept the in-network rate (or negotiate with the insurer), instead of issuing a large balance bill to the patient. In emergencies, patients cannot be asked to forgo their surprise billing protections there is no allowance for notice and consent exceptions for emergency services.

Out-of-Network Non-Emergency Services at In-Network Facilities

The No Surprises Act billing regulations also safeguard patients who receive non-emergency care at in-network facilities when they are inadvertently treated by an out-of-network provider. This situation often results in surprise bills; for instance, a patient may schedule surgery at an in-network hospital, but certain providers (such as the anesthesiologist, radiologist, or even a consulting specialist). According to the new legislation, if your practice or physicians are out-of-network but operating within an in-network hospital or ambulatory surgery center, you generally cannot charge. The patient is shielded from the balance bill, akin to the emergency rule.

How Payment Functions

In essence, receiving care at an in-network facility activates surprise billing protections for the patient. The patient’s health plan will compensate you (the out-of-network provider) at a predetermined rate, and you are prohibited from pursuing the patient for any remaining balance. Instead, you should engage in negotiation or arbitration with the insurer if you believe the payment is inadequate (the IDR process is discussed below). This regulation applies to all out-of-network providers operating within an in-network facility, unless the provider adheres to a specific notice and consent protocol with the patient (and unless the service falls under certain exceptions that cannot be waived).

Ancillary Providers: Waiver Prohibition

The law categorizes specific specialties as “ancillary services” that are essential to a procedure and for which patients generally do not select the provider. These specialties encompass emergency medicine, anesthesiology, pathology, radiology, neonatology, and diagnostic services such as radiology or laboratory work, along with assistant surgeons, hospitalists, intensivists, and others who operate behind the scenes. If your practice offers any of these services at an in-network facility, you are never permitted to balance bill the patient, even with their consent. The patient is consistently safeguarded; you must accept the payment from the plan and the patient’s in-network contribution.

Notice-and-Consent for Other Clinicians

For other categories of out-of-network physicians (such as a surgeon or consulting specialist not included in the plan network), there exists an option to bill out-of-network only if you secure the patient’s informed consent beforehand. The following section elaborates on this Notice and Consent exception. Should you fail to obtain proper consent or if the patient chooses not to sign it, you must treat the situation as a protected scenario and abstain from balance billing.

Key Considerations for Small or Private Practices

If you are an out-of-network provider treating a patient at an in-network hospital or ASC, you typically cannot charge the remaining balance to the patient. Plan either to ensure that the patient’s protections are upheld or utilize the official waiver process if allowed. Small practices that occasionally operate in facility settings should establish a standard protocol to determine when a patient’s insurance is out-of-network and how to manage billing in accordance with the No Surprises Act billing regulations.

Notice and Consent Exception for Out-of-Network Care

In specific non-emergency circumstances, the No Surprises Act billing regulations permit an out-of-network provider to request that the patient waive their surprise billing protections, but only if very particular conditions are satisfied.

Essentially, if a patient is prepared to voluntarily pay more to consult an out-of-network physician at an in-network facility, and the service qualifies, the provider must provide a standard notice.

Is notice-and-consent permissible?

It is never permissible for emergency services or for “ancillary” services such as anesthesiology, pathology, radiology, etc. – those services remain protected. It is only permissible for non-emergency, non-ancillary services rendered at an in-network facility, where the patient has an alternative in-network option. For instance, a surgeon who is outside the patient’s network could potentially utilize notice-and-consent if the patient could have opted for an in-network surgeon instead. If no in-network provider was available to perform the service, then the patient did not truly have a choice, and you cannot request them to waive their rights in that situation (the law prohibits the use of notice-and-consent when no in-network alternative is available).

How can one obtain appropriate consent?

The law mandates the use of a Standard Notice and Consent form provided by the federal government, without any alterations. This form must explicitly state that the provider is out-of-network, include a good-faith estimate of the service charges, and inform the patient of their right to decline and seek care from an in-network provider. The notice and consent documents must be delivered separately (not hidden within other paperwork) and must be provided with sufficient lead time:

• If the appointment or service is arranged a minimum of 72 hours prior, the patient is required to receive the notice and consent at least 72 hours before the date of the service.
• If scheduled with less notice (less than 72 hours ahead), the patient should receive the notice on the same day of scheduling, and at least 3 hours before the service is rendered.

The patient’s written consent should be acquired after they have received the notice and had adequate time to review it. The consent represents the patient’s agreement to receive treatment out-of-network and to pay any out-of-network charges specified. Patients must not be pressured the consent must be given voluntarily. (However, it is important to note that providers may refuse to treat the patient if they opt not to sign the waiver; the law does not compel a provider

Good Faith Estimates (GFEs) for Patients Without Insurance or Those Paying Out of Pocket

Another significant aspect of the No Surprises Act billing regulations focuses on price transparency for patients who lack insurance or opt not to utilize it. Effective January 1, 2022, all providers are mandated to supply a Good Faith Estimate (GFE) of anticipated charges prior to delivering services to any patient who is uninsured or self-paying. Request an estimate, you are legally obligated to provide a Good Faith Estimate of the expected costs.

What is a GFE?

It is fundamentally a documented estimate of the anticipated costs for a planned service or procedure. It ought to be clear, detailed, and encompass reasonably expected fees for all components of the service. The purpose is to inform patients in advance about the amount they will be required to pay, thereby ensuring there are ‘no surprises’ on the invoice. Charge for each, any relevant diagnosis or CPT codes, and the total expected cost (often covering a ‘period of care’, such as the surgery and associated pre- and post-operative care). If multiple providers or facilities are involved in the service, ideally, the GFE should also include those, or those providers should issue separate GFEs. The Centers for Medicare & Medicaid Services (CMS) has made available a GFE template and guidelines that practices can utilize to ensure they include all necessary information.

When and how to provide GFEs?

Timing is crucial. Regulations establish specific deadlines based on when the service is scheduled:

• If a service is scheduled at least 10 business days in advance, the GFE must be provided within 3 business days of scheduling.
• If a service is arranged at least 3 business days prior (but less than 10 days ahead), the Good Faith Estimate (GFE) must be delivered within 1 business day of the scheduling.
• If an uninsured patient merely requests an estimate (without scheduling), it should also be provided within 3 business days of the request, even if no date is established.

The Good Faith Estimate (GFE) must be provided in writing, either on paper or electronically, and should be articulated in a clear and comprehensible manner. Smaller practices may incorporate this into their scheduling processes; for instance, when a self-pay patient contacts your office to arrange a procedure, your staff could enter the services into the billing system and produce the estimate letter on the same day or the following day.

The Centers for Medicare & Medicaid Services (CMS) has expressed flexibility during the initial rollout; for example, they are exercising enforcement discretion regarding the inclusion of estimates from other providers within a single GFE. However, it is advisable to make a sincere effort to be as thorough and precise as possible. While there is no mandated standardized format, the model GFE template provided by CMS serves as a useful reference. It guarantees that you include disclaimers indicating that the estimate is not a bill, as well as the rights of the patient, including the new dispute process in cases where the final bill significantly exceeds the estimate.

Patient-Provider Dispute Resolution (PPDR) for Excess Charges

What occurs if you issue a Good Faith Estimate, yet the actual bill turns out to be considerably higher? If a self-pay patient receives a final bill that surpasses the GFE by $400 or more for any particular item or service, the patient is entitled to initiate a dispute to ascertain a fair amount. In essence, a considerable deviation from the estimate can be contested and presented to an independent arbitrator.

For instance, suppose your clinic issued a Good Faith Estimate (GFE) of $1,000 for a specific set of services, but complications arose, resulting in a bill of $1,600. If any individual service exceeds the estimate by $400 or more, the patient has the right to dispute the charges. The Patient Protection and Affordable Care Act (PPACA) process is managed by the Department of Health and Human Services (HHS) via an online portal. An independent dispute resolution entity, distinct from the insurance Independent Dispute Resolution (IDR), will require you to justify the increased charges, potentially by demonstrating that the patient requested additional services or that unforeseen circumstances occurred. They will then determine whether the patient is liable for the full difference or a reduced amount. There is a nominal administrative fee for the patient to initiate a dispute (to deter frivolous claims), but this fee is refundable if the patient is successful.

For private practices, the key takeaway is to aim for precise estimates and maintain clear communication. If circumstances change (for example, during a procedure, you realize that additional services are necessary that will incur higher costs), it is prudent to inform the patient and consider updating the GFE if feasible. While unexpected clinical situations can arise, it is essential to minimize cost surprises. Maintain thorough documentation explaining the necessity of any additional charges in case you need to justify them. It is important to remember that the responsibility lies with the provider to demonstrate why the extra costs were justified. If you overcharge uninsured patients without proper justification, not only can an arbiter reduce your allowable charge, but your practice may also face penalties or be required to refund the excess amount.

Independent Dispute Resolution (IDR) Between Providers and Insurers

While patients are now protected from numerous unexpected bills, a pertinent question arises: how are out-of-network providers compensated, and what is the amount? The No Surprises Act billing regulations have established an Independent Dispute Resolution (IDR) framework for providers and health plans to address payment disagreements in surprise billing cases. It is only utilized after the provider and the insurance plan have attempted to negotiate initially.

Here’s a brief overview of the process:

When you (an out-of-network provider) file a claim with the patient’s health plan for a service that falls under the No Surprises Act and the balance billing prohibition of 2025 (for instance, an out-of-network surgical procedure at an in-network hospital, or an emergency room visit), the health plan will either make an initial payment or issue a denial. This period serves as an informal settlement opportunity – you and the payer can converse and strive to reach a compromise. There is even a standardized form available to commence this open negotiation.

• If you successfully reach an agreement with the insurer during this period, that is excellent; the claim will be settled at the mutually agreed-upon amount.
• If an agreement is not achieved by the conclusion of the 30 business days, either party may initiate IDR within 4 business days. The arbiter will then select one of the two proposed amounts whichever they consider most appropriate based on the circumstances and that decision will be binding for both parties. (This “winner-take-all” method encourages both sides to present a reasonable offer.)

There are specific guidelines regarding the factors that the IDR entity may take into account. At the outset, the law and regulations highlight the importance of the qualifying payment amount (QPA) – which is essentially the insurer’s median in-network rate for that service within the region – as a reference point. Nevertheless, providers have the opportunity to present evidence indicating that the case may be atypical (such as patient acuity, provider experience, market share, etc.) to advocate for a higher payment. Recent legal disputes and updates to the rules have modified the IDR process, but for a small practice, the key takeaway is: there exists a mechanism to contest inadequate payments, although it necessitates time and possibly incurring an arbitration fee.

(The AMA and various organizations have released guides for physicians regarding the IDR process. If you engage a medical billing service, ensure they are equipped to manage open negotiations and potential IDR filings on your behalf.)

Disclosure and Notification Obligations for Providers

Under the No Surprises Act billing regulations, providers and facilities are required to inform patients of their rights and protections against surprise billing compliance. Every provider or clinic subject to these regulations must make a Disclosure Notice accessible to patients. Specifically, it is necessary to display a one-page notice (a model is provided by the government) that outlines the latest updates on the No Surprises Act protections and provides information on how to contact relevant agencies if a patient believes their rights have been infringed.

This notice should be prominently displayed in your office (for instance, in a waiting room or check-in area) and on your practice’s website, if applicable, no later than when you request payment or send the bill for the service. (CMS guidance indicates that it does not necessarily need to be included with the bill itself, but it must be provided around that time.)

The model disclosure notice from HHS/CMS serves as a straightforward means of compliance. It is essentially a standard document titled “Patient Protections Against Surprise Billing” that you complete with your contact information. It informs patients that they should not be balance billed in specific situations, lists the dollar amounts (in-network rate) for which they are responsible, and explains how to report if they are incorrectly billed. Utilizing the model notice (without modifying the required language) is advisable to ensure that all necessary points are covered.

For small practices, adhering to the disclosure rule can be straightforward: simply print the one-page notice and display it in your office, upload the text or PDF to your website (potentially on your billing or patient resources page), and ensure that the notice is included in either the intake packet or with the first invoice for relevant patients. If your practice exclusively sees patients in your office and does not treat them in hospital or ASC settings, the law technically mandates the notice if you are providing services to patients covered by the Act (which is likely the case if you treat commercially insured patients). The AMA has indicated that if you do not operate in a hospital or facility setting at all, you may not be required to provide the notice to every patient individually; however, since many private practices maintain some hospital affiliations or err on the side of caution, it is advisable to include it for all patients. This requirement is relatively simple to fulfill and promotes transparency with your patients.

Penalties and Enforcement

Compliance with surprise billing regulations is mandatory – there are significant penalties for noncompliance. Federal regulators (the Centers for Medicare & Medicaid Services, in collaboration with the Department of Labor and Treasury) can impose civil monetary penalties of up to $10,000 for each violation on providers or facilities that knowingly breach the balance billing protections. For instance, if a practice incorrectly bills a patient $5,000 for an out-of-network surgery that should have been protected (and fails to reimburse promptly after being notified), this could result in a penalty. Each occurrence is treated as a separate incident, meaning that multiple improper bills could lead to increased fines.

That being said, the government has also established a procedure for providers to evade penalties in specific circumstances by promptly rectifying the error. If a provider discovers that they have mistakenly billed a patient in a surprise billing situation, they are permitted to reverse the charges and issue a refund to the patient (including interest) within 30 business days; by doing this, they may avoid the $10,000 penalty in that instance. The aim is to motivate providers to swiftly self-correct if a surprise bill inadvertently occurs.

Enforcement is a collaborative effort between federal and state authorities. Certain states have their own regulations and enforcement strategies regarding surprise billing. “The revised billing regulations for providers enable states to enforce the federal No Surprises Act rules within their territories, and if they fail to do so, HHS will step in.” Patients have the right to submit complaints regarding surprise billing matters through a federal hotline or an online portal. For a small practice, any complaint could trigger an investigation, so it is advisable to be proactive and clearly compliant. Maintain documentation (such as signed consent forms, copies of GFEs, etc.) as proof that you adhered to the regulations.

In addition to government penalties, there are also reputational and legal risks. Engaging in balance billing of a patient when it is prohibited can result in considerable patient dissatisfaction, erosion of trust, negative media coverage, or even legal repercussions. It is far more prudent to ensure your billing is accurate from the outset.

Conclusion

The No Surprises Act billing regulations signify a major transformation in medical billing practices to eliminate unexpected financial burdens for patients and enhance the transparency of healthcare costs. For private practices in the United States, it is essential to comprehend and adhere to these billing regulations as part of standard business operations.

In summary, services provided in emergency and in-network facilities must be billed as in-network (unless a valid waiver is secured in the limited circumstances permitted), good faith estimates are required for self-pay patients, and new avenues for dispute resolution (both between patients and providers, as well as between providers and payers) must be honored to address any conflicts. Furthermore, practices are obligated to inform patients of their rights through clear disclosures and to comply with upcoming regulations, such as the AEOB requirements, as they are implemented.

Although it may initially seem overwhelming, achieving compliance with the No Surprises Act is feasible with thorough planning. By educating your staff, revising your procedures, and potentially utilizing the expertise of external physician billing services, you can incorporate these requirements into your practice’s operational workflow. This approach not only helps avoid legal repercussions but also fosters trust with your patients, who will value a transparent and equitable billing process free from unpleasant surprises.