Implementation of the No Surprises Act (2024)

On Dec. 27, 2020, the No Surprises Act (NSA) was signed into law as part of the Consolidated Appropriations Act of 2021. These provisions were intended to address unexpected gaps in insurance coverage that result in “surprise medical bills” when patients unknowingly obtain medical services from physicians and other providers outside their health insurance network.

Because the No Surprises Act, which takes effect on Jan. 1, 2022, imposes limits and confers some rights on physicians caring for patients in these situations, it is important for physicians to understand how the law will affect them.

Read the AMA’s summary of the NSA (PDF).

Access an initial toolkit (PDF) for physicians on implementation of the No Surprises Act (NSA). Many of the provisions of the NSA take effect on Jan. 1 and this document provides guidance on several of those provisions. The AMA will be updating this document as additional guidance is available, as well as developing new resources on the remaining provisions of the NSA not included in this toolkit.

Access a second toolkit(PDF) for physicians on implementation of the billing process for certain out-of-network care under the No Surprises Act (NSA). The AMA will be updating this toolkit as additional information becomes available and changes to existing guidance are issued, including guidance related to the Independent Dispute Resolution process.

On Friday, August 19, the Departments of Labor, Health and Human Services (HHS) and the Treasury (“the Departments”) issued Final Rules addressing several provisions of the physician and provider payment process for out-of-network care under the No Surprises Act (NSA).

The Final Rules and supporting FAQs respond to several concerns raised by the AMA and other physician and provider organizations, including:

• Removing the requirement that Independent Dispute Resolution Entities (IDREs) must presume that the Qualifying Payment Amount (QPA) is the appropriate out-of-network rate.
• Clarifying that the initiating party to an open negotiation is always permitted to send the standard Federal initiation notice (i.e., a plan cannot require physicians/providers to use the plan’s proprietary portal).
• Requiring plans to provide additional information on why a claim was downcoded if the QPA is based on a downcoded service or modifier.
• Clarifying that plans must calculate a median contracted rate separately for each physician specialty.

Download thesummary of the Final Rules (PDF) and accompanying documents from the Departments.

The Departments issued an Interim Final Rule (IFR) in September outlining a process for physicians and health plans to settle disputes over out-of-network payments, beginning with an initial payment or notice of denial, followed by an open negotiation period and the formal IDR process, if pursued. Unfortunately, this IFR directed the IDR entities to presume that the QPA (considered the plan’s median in-network rate) is the appropriate out-of-network rate. Under this IFR, other factors relevant to payment and enumerated in the statute are only to be considered in limited circ*mstances, despite no statutory language creating this presumption.

The AMA and the American Hospital Association (AHA) filed a complaint(PDF) andmotion for a stay or for summary judgment(PDF) on Dec. 9, 2021, in the U.S. District Court for the District of Columbia arguing that the IFR conflicts with the statute by establishing a presumption in favor of the QPA. The text, context, purpose and history of the NSA make clear that the statutory IDR procedure Congress created leaves no room for the agencies to require the arbitrator to put a thumb on the scale in favor of health insurers over providers. The Physicians Advocacy Institute, nine national medical specialty societies and sixteen state medical associations filed an amicus brief (PDF) in support of the AMA-AHA’s lawsuit.

The Texas Medical Association (TMA) brought a similar suit in the U.S. Federal District Court for the Eastern District of Texas. In February, that court found in favor of TMA and vacated the provisions in the IFR that weighted the IDR process in favor of health plans. In April, the administration filed a notice of appeal to the U.S. Court of Appeals for the Fifth Circuit challenging the ruling but asked the court to hold its appeal pending the release of Final Rules. The court granted the administration’s request and Final Rules were issued on August 19.

On July 1, 2021, the Departments of Health and Human Services (HHS), Department of Labor (DOL) and Department of Treasury (the Departments) and the Office of Personnel Management (OPM) issued an interim final rule (IFR) (PDF) implementing several provisions of the NSA, enacted as part of the Consolidated Appropriations Act, 2021 (CAA).

Given statutory timeframes required under the NSA and the pending implementation of most provisions by Jan. 1, 2022, the Departments made the decision to issue an IFR. As a result, the requirements outlined in the IFR are final and will become effective on Sept. 13, 2021.

In general, the IFR provides the following:

• In determining how the qualifying payment amount (QPA) is calculated, the IFR reduces the likelihood that plans will need to use data from outside, independent databases. This is done through broad definitions of “markets” and “geographic regions,” allowing reliance on small data sets, benchmarking for “new service codes,” etc.
• Reduces the role of bonuses, risk sharing, penalties and other incentive-based and retrospective payments or payment adjustments in the calculation of the QPA.
• Establishes a structure for the interaction of state and federal surprise billing requirements, where state law preempts federal law when either a set payment amount or dispute resolution process is in place for state-regulated plans and, when applicable, self-funded Employee Retirement Income Security Act (ERISA) plans that opt-in to the state law.
• Outlines a process by which a patient receives notice and potentially provides consent to receive out-of-network care and forgo the financial protections of the NSA.
• Establishes criteria for facilities and physicians/providers to provide required disclosure to patients about balance billing protections—both state and federal.
• Broadens complaint processes for patients, physicians and plans.
• Reaffirms several patient protections for emergency medical care, including the prudent layperson standard.

The AMA has several concerns about the way the QPA (median contracted rate) will be determined. Additionally, while the Departments attempt to consolidate and standardize some administrative requirements on physicians, in other areas the Departments expand requirements in ways that may not benefit patients but result in burdens on physicians.

Download the PDF for part one of the summaries on the IFR of the No Surprises Act.

AMA comments (PDF) to the Departments on IFR Part I.

On September 30, 2021, the Departments issued a second IFR implementing the NSA. This IFR implements the following parts of the NSA:

• The open negotiations and independent dispute resolution (IDR) processes between providers (physicians, hospitals, etc.) and health plans.
• Section 110 of the NSA expanding the scope of the federal external review process to cover adverse benefit determinations under the NSA.
• The good faith estimate (GFE) requirements for uninsured patients and patients who are not planning to use their coverage (i.e., self-pay).
• The dispute resolution process for uninsured or self-pay patients when the GFE significantly exceeds the costs of care.
• Establishes a federal IDR portal to be used for IDR entity (IDRE) certification, the initiation of the IDR process, the selection of an IDRE by parties, the submission of supporting documentation to IDREs and the submission of IDRE reporting metrics.

The AMA has serious concerns with several provisions of IFR Part II, including the way in which the dispute resolution process is structured. The IFR establishes the qualifying payment amount (QPA) as a presumptively reasonable out-of-network payment and directs the IDR entities to select the offer closest to the QPA unless credible information submitted by the parties clearly demonstrates that the QPA is materially different from the appropriate out-of-network rate.

With this requirement, the Departments are underscoring their objective to reduce the frequency with which the IDR is used and ultimately bringing down the in-network rates of providers. Although the QPA is meant to represent the median in-network rate, the method used to calculate it (as outlined in Part I IFR), will often result in much lower amounts. Together, the Part I and Part II IFRs will make it more difficult for physicians to receive fair payment for out-of-network services and to enter into meaningful contract negotiations with health plans which now have little incentive to offer fair contracted rates.

Download the PDF for part two of the summaries on the IFR of the No Surprises Act.

On Sept. 10, 2021, the Departments issued a proposed rule to implement additional components of the NSA. Of importance to physicians as it relates to the NSA, the proposed rule would establish a similar enforcement structure over providers to that established under the Affordable Care Act (ACA), allowing states to enforce NSA provision to the extent of their authority and, if a state fails to substantially enforce the requirements, the federal government will step in.

AMA comments (PDF) on the proposed rule.

April 2022

• April 22:AMA letter(PDF) to Departments urging removal of rebuttable presumption in Final Rules.

March 2022

• March 7:AMA comments on the administrative burden(PDF) associated with the Good Faith Estimate requirements under the NSA.

Dec. 2021

• Dec. 6: AMA comments on NSA IFR Part II (PDF) urging revisions to the independent dispute resolution process.

Nov. 2021

• Nov. 17: Medical association sign-on letter (PDF) to Departments urging changes to IDR process in IFR Part II.
• Nov. 5: Congressional sign-on letter (PDF) to Departments urging changes to IFR Part II to align the law’s implementation with the legislation Congress passed.

Oct. 2021

• Oct. 18: Comment letter (PDF) proposed rules implementing certain provisions of Title I (No Surprises Act) and Title II (Transparency) of Division BB of the Consolidated Appropriations Act, 2021 (CAA).

Sept. 2021

• Sept. 7: Comment letter (PDF) on the July 12, 2021, Interim Final Rule (IFR): Requirements Related to Surprise Billing; Part I, implementing provisions of the No Surprises Act (NSA).

Aug. 2021

• Aug. 11: Comment letter (PDF) to CMS on implementation of the No Surprises Act, advanced explanation of benefits and good faith estimates.

June 2021

• June 17: Congressional sign-on letter (PDF) to Departments, urging to “reflect congressional intent in your rulemaking by ensuring a balanced process to settle payment disputes between health plans and providers,” in regard to the NSA.
• June 14: Comment letter (PDF) to CMS administrator on IDR process.

May 2021

• May 21: Comment letter (PDF) to CMS acting administrator on QPA and related calculations in the NSA.

AMA Advocacy Insights webinar series: Implementing the No Surprises Act

During the premiere AMA Advocacy Insights webinar, experts discuss the implementation of the NSA, including issues addressed in the AMA’s surprise billing toolkit, enforcement challenges and the interaction between state and federal surprise billing requirements.

AMA Advocacy Insights webinar series: Out-of-network payment process under the No Surprises Act

As a follow-up to the first NSA webinar, this AMA Advocacy Insights webinar focuses on the payment process for physicians and other providers in surprise medical billing situations.