No Surprises Act: Limiting Out-of-Network Rates

Introduced in early July 2019 to Congress, H.R. bill 3630—known as the No Surprises Act—is intended to limit out-of-network rates that may be charged to individuals insured by healthcare plans for certain emergency and non-emergency services [1]. The bipartisan No Surprises Act (shorthand for ‘preventing surprise medical bills’) was spearheaded by Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ) and Ranking Member Greg Walden (R-OR). The bill saw full passage in the Energy and Commerce Committee on July 17, 2019 and was then integrated into H.R. 2328, the Reauthorizing and Extending America’s Community Health Act [2, 3]. The impetus for the legislation arose from cases in which plan-holding patients have been surprised with unanticipated medical charges after receiving emergency services. Despite the fact that services are provided at in-network hospitals, patients may still receive care from out-of-network medical professionals—most commonly, unknowingly

Firstly, the proposed legislation addresses this issue by requiring that healthcare coverage plans covering emergency services bill members no more than the median in-network rate for emergency services, regardless of provider network status. Secondly, the bill goes further by prohibiting medical insurers from charging plan holders more than the average in-network cost for non-emergency services administered by out-of-network providers at in-network facilities [1, 3, 4]. In short, under the No Surprises Act, out-of-network providers are barred from billing patients the difference between in-network and out-of-network rates for emergency services.

Additionally, for non-emergency services, the bill protects plan holders from being charged for the difference in rates for non-emergency medical services rendered at in-network facilities, unless a patient is provided with specific notice and written-consent requirements to ensure that they are aware of the possibility of incurring out-of-network fees prior to receiving treatment [1, 2, 4]. However, an important caveat regarding the billing of non-emergency services in special cases is built into the legislation. This is that out-of-network providers may not bill plan holders for the difference between the rates for out-of-network and in-network non-emergency services if the provider whose services are required is the only professional available and/or qualified to deliver necessary services or treatments. Still, the provider in question must be based at an in-network facility for the proposed rate-capping to apply 

As part of the No Surprises Act, the Department of Health and Human Services is required to disburse grants to create and manage All Payer Claims Databases intended to make insurance claims and payment data public. Additionally, the bill calls for healthcare insurers to publish provider directories and instructs the Government Accountability Office and the Department of Labor to research and disclose information pertinent to commercial healthcare markets [1, 2, 4]. With similar aims as those encompassed by the No Surprises Act, the Senate Health, Education, Labor and Pensions (HELP) Committee passed the Lower Health Care Costs Act (S. 1895). Moving forward, leaders of the House Energy and Commerce Committee and Senate Health, Education, Labor and Pensions (HELP) Committee are in conversation over compatible and shared goals in their approaches [2, 3]. Such collaborations are of utmost importance as there exists significant potential for cost savings; for the No Surprises Act, an estimated $21.9 billion in savings is projected over 10 years [4, 5]. With impending expiration of health provisions and considerable monetary implications at stake, legislation intended to reduce surprise billing is likely to garner attention as the year closes 

Pallone, and Frank. “H.R.3630 – 116th Congress (2019-2020): No Surprises Act.”, July 11, 2019.

[2] “House Energy and Commerce Committee Advances Surprise Billing Legislation.” AANS, n.d.

[3] “Pallone & Walden on Committee Passage of No Surprises Act.” Democrats, Energy and Commerce Committee, July 17, 2019.

[4] “H.R. 3630: No Surprises Act.”, July 9, 2019.

[5] “What’s New in Washington – October 2019 – Strategy – United States.” What’s New in Washington – October 2019 – Strategy – United States, October 24, 2019. Updates Analysis/What’s New in Washington October 2019.[6] Keisling, Jonathan. “Assessing the Legislative Responses to Surprise Billing and Other Transparency Issues.” AAF, July 10, 2019.