The No Surprises Act, passed in late 2020 as part of the Consolidated Appropriations Act of 2021, introduces surprise billing legislation at the federal level and will make sweeping changes to the health care industry in the years to come.

Beginning Jan. 1, 2022, patients will only be responsible for their in-network cost-share and will no longer be balanced-billed when they receive the following care from nonparticipating providers: (1) emergency services, (2) air ambulance transport and (3) services in a participating facility, unless the patient first gives informed consent.

In other words, a nonparticipating provider can no longer bill a patient for charges that are not covered by insurance. If providers are dissatisfied with their payment, they can initiate independent dispute resolution with the patient's health plan or insurer. These disputes are resolved by an independent dispute resolution entity that decides between the parties' offers in a baseball-style arbitration.

In making their decision, independent dispute resolution entities are required to consider the qualifying payment amount, which is generally the payor's median negotiated rate with other providers for the item or service at issue.

Independent dispute resolution entities also consider other metrics such as the parties' respective market share and any previously negotiated rates between the parties. 

Independent dispute resolution entities cannot, however, consider the provider's billed charges, usual and customary charges — which is typically defined as what providers in the area usually charge — or reimbursement rates under government programs such as Medicare or Medicaid.

The results of independent dispute resolution are binding except in very limited circumstances.

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