What Does the "No Surprises Act" Mean for Your Family's 2022 Health Budget?

According to Forbes, 50 percent of Americans carry medical debt. A 2021 Debt.com online survey asked 541 people nine questions related to said debt; adults from all 50 states and Washington, D.C., responded. Their small sample highlighted big problems: 50.09 percent of those who responded said they had outstanding medical debt—and 45.86 percent of those with medical debt said bills had gone to collections. Of those with medical debt, 23.77 percent said the primary source was diagnostic tests and 18.56 percent said it was emergency room services.

The No Surprises Act (NSA), passed by the U.S. Congress in December 2020, became law on January 1, 2022. The Act was devised as a consumer protection remedy, to ward off surprise healthcare bills from out-of-network physicians and healthcare providers. Peterson KFF found that in 2020, these surprise bills popped up in one in every five emergency room visits.

While you likely won't see an immediate drop in healthcare costs for your family due to the NSA this year, the hope is that over time, medical costs will become easier to understand and more predictable to account for in your annual budget.

If you think it's hard enough to keep providers and labs straight when you're perfectly well, just imagine the difficulty of keeping track and preventing switcheroos while you (or someone you love) are sick or incapacitated. The new rule will provide billing protections for patients in emergency situations, including when they need air ambulance services from out-of-network providers and non-emergency care from out-of-network providers at in-network facilities.

Thus, the Act stands to protect vulnerable families from excessive out-of-pocket costs, by making healthcare costs more manageable. Here's a detailed breakdown of how the new law plans to prevent unnecessary medical care expenses in 2022.

Transparency

Chief among the new law's intentions is transparency in healthcare billing. Patients will have more transparent claims processing. Typically, insured patients are required to cover a co-pay for part of their healthcare costs. If they use providers and facilities that are in the network of the insurance company, the costs are discounted and, often, pre-published.

Insurers will also be required to provide transparent price comparison information over the phone, to keep their provider directories current, and to build an online price comparison tool so patients can shop around for providers within their budget.

Justin Nabity, founder and CEO of Physicians Thrive, says that some health insurance plans already include protections against unexpected medical expenses. "You don't have to worry if you have Medicare, Medicaid, or TRICARE coverage, or if you get care from the Indian Health Service or the Veterans Health Administration, because you're already protected from unexpected medical expenses from doctors and facilities participating in these programs."

But if you don't have insurance or pay for your own treatment, these new guidelines ensure that you can get an accurate estimate of how much your care will cost before you get it.

Before a health care service is performed, patients can get an Advanced Explanation of Benefits (AEOB). This report will provide them with a good faith or reasonable estimate of pricing and cost-sharing, as well as information about whether or not the provider(s) offering their care are in-network. If care providers are not in-network, information about how to locate in-network providers will be offered. The NSA helps patients better understand their cost-sharing obligations up front.

Alignment With Your Healthcare Network

The NSA aims to work in tandem with health insurance companies. Patients will be shielded against unexpected medical fees for non-emergency treatments rendered by an out-of-network practitioner at an in-network institution.

Unexpected medical bills could arise if a provider isn't in-network, although the office, clinic, or hospital is said to be. For example, patients are usually surprised when they see a charge from an out-of-network provider who delivers, for example, auxiliary services (such as those provided by a pathologist, radiologist, or anesthesiologist) or specialty services in response to unforeseen problems (such as those delivered by a cardiologist or neonatologist).

Out-of-network healthcare providers often work across a variety of facilities that need their talents, but patients aren't privy to those staffing decisions—and certainly don't want to be left holding the bill.

The No Surprises Act generally demands that the patient knows in advance and freely decides to employ an out-of-network physician, but the law does have visible blind spots. Rebecca Phillips, a licensed professional counselor with Mend Modern Therapy in Texas, noted that the Act "will not cover ground ambulance services. Furthermore, your provider may utilize an out-of-network provider for lab tests, including bloodwork."

Patients and their care advocates will have to be hyper-vigilant about these lingering services that can contribute significantly to medical care expenses.

Consumer Advocacy

The NSA provides patients and families the opportunity to seek legal recourse in the event of billing disputes. If you get a surprise bill for services provided in 2022 and beyond, you're allowed to appeal your health plan's decision, pursue an external appeal, and seek assistance from appropriate regulatory authorities.

The No Surprises Act stipulates a 30-day open discussion period for healthcare providers and insurers to resolve payment concerns. If no payment agreement is reached during this period, either party can seek independent dispute resolution (IDR).

In the event of a dispute regarding patient billing and cost-sharing, patients can go through a federal arbitration process, file complaints online, or call a toll-free hotline to seek a solution. These processes also help settle disputes between patients and providers when the patient is uninsured or self-paying. Nabity explains that "if your final charges are at least $400 greater than your good-faith estimate and you file your dispute claim within 120 days of receiving services in 2022, you can dispute a medical bill."

In short, the legislation plans to protect people from surprise medical expenses by offering complaint adjudication, pricing disclosure policies, and billing dispute resolution.

The Bottom Line

If healthcare expenses are already built into your budget, you'll want to verify cost estimates for expected services and to ask for an Advanced EOB for non-emergency care. You'll need to continue to pay down pre-existing medical debt by negotiating with providers, seeking financial assistance programs from hospitals and social services institutions, and reaching out for help from medical debt cancellation focused organizations, such as RIP Medical Debt.

Although it is no cure for the large amounts of medical debt already accrued, the No Surprises Act offers consumer protection measures that are poised to mitigate the accumulation of millions more. Keep in mind that the Act is still new, and many of the processes are yet to be fully tested. When all its clauses are effectively implemented, this Act can spell thousands of dollars in savings for many families in need. While it is no panacea, it's certainly a welcome preventive measure.