The No Surprises Act Was Supposed to End Surprise Bills. Here Is What It Missed.

In January 2022, the No Surprises Act took effect. It was described in congressional testimony as the most significant consumer protection in healthcare billing since the ACA. The law had bipartisan support, patient advocacy backing, and a clear mandate: patients who seek care at in-network facilities should not receive bills from out-of-network providers they had no meaningful ability to choose.

Three years in, surprise bills still come. The reasons why tell a more complicated story than the law's authors acknowledged.

What the Law Actually Does

The No Surprises Act addresses a specific and genuinely common harm: a patient goes to an in-network hospital for surgery, receives care from an in-network surgeon, and then receives a bill from an out-of-network anesthesiologist, radiologist, or assistant surgeon who was present in the operating room but whom the patient had no opportunity to select or negotiate with.

The law prohibits providers from billing patients for more than their in-network cost-sharing in these circumstances. The patient's obligation is capped at what they would have owed if the provider were in-network. The balance, whatever the out-of-network provider would otherwise have charged above that amount, cannot be passed to the patient. This protection applies to emergency care at any facility, and to non-emergency care at in-network facilities when the patient had no practical ability to choose an in-network provider.

The law also extends to air ambulances, which had been a significant source of surprise billing because air transport is frequently provided by out-of-network carriers, and patients in emergency transport situations cannot negotiate.

What It Does Not Cover

The No Surprises Act was written with a specific and bounded definition of surprise billing. What falls outside that definition is extensive.

Ground ambulances are explicitly excluded. This was not an oversight. Ground ambulance billing was a contested issue during the law's drafting, with ambulance providers and municipalities arguing that the economics of ground transport are different from other emergency services. The result is that patients who receive ground ambulance transport, a situation they almost never control, are not protected from out-of-network billing under federal law. Some states have passed their own ground ambulance protections, but coverage is uneven.

Facility fees are not prohibited by the No Surprises Act. A facility fee is a charge levied by the hospital or health system for the use of the facility itself, separate from the physician's professional fee. When a patient is seen at a hospital-owned outpatient clinic, a facility fee may be billed in addition to the physician's fee. That fee is subject to cost-sharing based on the facility's network status. If the facility is in-network, the facility fee is covered under the plan's in-network terms. But the fee can be significant, and patients who did not know a fee would be assessed, and who assumed they were simply paying a copay, receive bills that are technically accurate but practically surprising.

The law does not address cost-sharing surprises. Even when the No Surprises Act applies and limits a patient's obligation to their in-network cost-sharing amount, that amount can still be large. A patient who reaches a facility mid-year, before meeting their deductible, owes the in-network deductible rate, which can run into thousands of dollars for a single visit. The law ensures the rate applied is in-network. It does not ensure the rate is affordable.

Three Years of Implementation

CMS has published data on No Surprises Act implementation through 2024. The complaint intake and enforcement infrastructure took time to build. In the first full year of implementation, CMS reported receiving tens of thousands of consumer complaints related to surprise billing, with a significant portion involving balance bills that the Act prohibits. Enforcement actions followed, though the pace and scope drew criticism from patient advocacy organizations, which argued that the complaint-based enforcement model placed too much of the burden on patients to identify violations and self-report.

A 2024 KFF analysis of No Surprises Act implementation found that the law had successfully reduced surprise bills from out-of-network providers at in-network facilities in circumstances the law clearly covers. Anesthesiology and radiology, the specialties most commonly associated with the original surprise billing problem, showed measurable decreases in out-of-network patient exposure. The law is working for the cases it was designed for.

Where it is not working, according to the same analysis, is in enforcement at the edges: facility fees, ground ambulances, and balance billing in circumstances that fall just outside the law's scope continue to generate patient harm. The infrastructure for disputing a non-prohibited surprise bill through insurance, or through the facility's billing department, remains opaque.

The Arbitration Problem

The No Surprises Act created an Independent Dispute Resolution process to handle payment disputes between insurers and out-of-network providers whose claims were affected by the law. This process was intended to remove the dispute from the patient's hands. Providers and insurers would negotiate the payment amount, and the patient would owe only their in-network cost-share, no matter how the dispute resolved.

What happened instead was a volume of arbitration filings that overwhelmed the system. Providers, particularly large physician groups and private equity-owned staffing companies, filed arbitration claims in large batches. In 2023, the CMS reported that more than 490,000 disputes had been submitted to the IDR process in the first year, far exceeding the volume the system was designed to handle. Disputes backed up. Resolution timelines extended.

For patients, the dysfunction in the IDR process did not directly change their billing obligation. Their cost-share remained capped at the in-network rate. But the arbitration dispute directly affected providers' decisions about maintaining network participation. Several physician staffing companies, facing lower payment through arbitration than they had received through balance billing, withdrew from insurance networks or argued publicly that the IDR process was structurally biased toward insurers. The downstream effect on network adequacy is an ongoing concern.

The Facility Fee Gap

Of the issues the No Surprises Act did not resolve, facility fees represent the most consistent source of ongoing surprise billing, primarily because patients do not know the fee is coming.

When a health system acquires a physician practice and converts it to a hospital outpatient department, the practice's billing status changes. Visits that previously billed only a professional fee now bill a professional fee and a facility fee. CMS data reviewed in a 2023 MedPAC report found that hospital outpatient department conversion of previously independent practices had accelerated significantly over the prior decade, with the proportion of physician practices under hospital ownership growing substantially.

The patient who has been seeing the same physician for five years may not know that the practice changed ownership. The facility fee appears on their Explanation of Benefits as a separate line item, billed by the hospital entity, often from a different billing address. The physician's service remains covered at the same rate. The facility charge carries different cost-sharing terms and, in many cases, draws from the deductible separately.

There is no federal prohibition on facility fees. Several states have passed disclosure requirements, requiring providers to notify patients that a facility fee will be assessed. Disclosure does not eliminate the fee.

What to Do Before a Non-Emergency Procedure

Before any scheduled non-emergency procedure at a hospital or hospital-owned facility, verify the network status of two separate things: the facility itself, and every provider who will be involved in your care.

Confirming that the hospital is in-network does not confirm that the anesthesiologist, assistant surgeon, radiologist, or hospitalist who touches your case is in-network. Ask your plan, in writing if possible, to confirm the network status of each provider whose name you have. If you cannot obtain a full list before the procedure, ask the facility's patient services department to help you identify which providers will be involved and to confirm their network status with your insurer.

Request a good-faith cost estimate before any non-emergency scheduled service. Under the No Surprises Act, providers are required to give uninsured patients a good-faith cost estimate before providing services. For insured patients, the requirement is less robust, but many facilities will provide one on request, particularly for surgical procedures.

If you receive a bill that includes charges from an out-of-network provider at an in-network facility, and you did not knowingly and voluntarily agree to waive your No Surprises Act protections in writing before receiving care, the bill may be prohibited. CMS operates a complaint intake process for No Surprises Act violations. Filing a complaint initiates a federal review of the bill and, in substantiated cases, enforcement against the provider or insurer.

The Gap Between the Law and the Bill

The No Surprises Act addressed a real and documented harm. For the cases it covers clearly, it works. The problem is that the healthcare billing landscape is large enough that what the law covers clearly is a meaningful but still bounded portion of the surprise billing patients actually experience.

Facility fees are legal. Ground ambulances are excluded. Cost-sharing is capped at in-network rates that can still be high. And the enforcement mechanism, a complaint process that requires the patient to identify the violation and initiate the process, places the burden on the person least likely to know that a burden has been placed on them.

The law changed the landscape. The landscape is large.

Sources: No Surprises Act, Pub. L. 116-260, Division BB; CMS No Surprises Act Implementation Data, 2022-2024; Kaiser Family Foundation, No Surprises Act Implementation Tracker (2024); CMS Independent Dispute Resolution Process annual report, 2023; MedPAC Report to Congress, Hospital Outpatient Department Policy (2023); CMS Good-Faith Estimate Requirements, 45 CFR 149.610.