Surprise! The No Surprises Act actually saves patients money
Study finds savings of nearly $600 per patient
A lot of self-proclaimed big, beautiful legislation doesn’t do much to benefit taxpayers but a study finds that’s not the case with the No Surprises Act, a bipartisan law enacted in 2022 to spare consumers from “surprise” bills resulting from out-of-network care.
In fact, the study by investigators at Mass General Brigham and the Richard A. and Susan F. Smith Center for Outcomes Research at Beth Israel Deaconess Medical Center found that the law dramatically reduced out-of-pocket costs, with an average annual savings of nearly $600 per patient. The findings are published in The BMJ.
“One in five insured adults in the U.S. incurred surprise bills before the No Surprises Act, and these bills frequently exceeded thousands of dollars, resulting in substantial financial hardship among patients,” said lead author Michael Liu, MD, MPhil, a clinical fellow in the Department of Medicine at Brigham and Women’s Hospital. “Government agencies have called for rigorous evaluations of the law, and we believe our paper is the first to do so.”
Control vs. “intervention” states
Liu and his colleagues analyzed data on 17,351 adults aged 19-64 years with direct-purchase private insurance. Some resided in intervention states that gained protections from the No Surprises Act and others resided in control states that already had laws providing comprehensive surprise billing protections and therefore did not gain additional protections from the law.
After implementation of the No Surprises Act, out-of-pocket medical spending declined significantly in intervention states—nearly $600 annually per patient—but not in control states, indicating that the law was successful in protecting patients from surprise medical bills.
Although experts initially projected that premium spending (fixed monthly payments to insurance companies) would decline because the law was supposed to promote fair payment negotiations between insurers and providers, the researchers observed that such spending was unchanged after the law.
Leveraging loopholes
“This finding is in line with anecdotal reports that providers—especially those backed by private equity firms—are leveraging loopholes and unfair tactics to secure higher payments at the expense of patients and the healthcare system,” said Liu.
Importantly, the No Surprises Act did not meaningfully reduce high burden medical spending, defined as a family spending more than 10% of their income on health care, suggesting that opportunities remain to build upon the law and pursue additional policy strategies to reduce healthcare-related financial strain, particularly among socioeconomically disadvantaged populations.
“Our findings have important implications for patients and should inform ongoing policy efforts to prevent financial toxicity and address the healthcare affordability crisis in the U.S.,” said senior author Rishi Wadhera, MD, MPP, MPhil, Associate Director of the Richard A. and Susan F. Smith Center for Outcomes Research.
Who’s covered?
The No Surprises Act applies to most patients with health insurance coverage, not just those who pay out of pocket or self-insure.
The law protects:
People with employer-sponsored health insurance plans (both fully-insured and self-insured employer plans)
Individual market health insurance plans
Most other group health plans
Who's NOT covered by the federal law:
Medicare beneficiaries (they have separate protections under Medicare rules)
Medicaid beneficiaries (states have their own surprise billing protections)
People without any insurance coverage
Some types of insurance like short-term plans or health sharing ministries
For uninsured patients: The law does include provisions requiring healthcare facilities to provide good faith cost estimates and follow certain billing practices, but the main surprise billing protections (like limiting out-of-network charges) obviously don't apply since there's no insurance network involved.
So the Act primarily benefits people who have insurance but were getting surprise bills when they unknowingly received care from out-of-network providers. The whole point was to protect insured patients who were following the rules by going to in-network facilities but still got hit with massive unexpected bills from out-of-network doctors working at those same facilities.
Self-insured employer plans (where the employer pays claims directly rather than buying insurance) are actually covered by the Act, which was important since many large employers use this model.
What’s covered
The law addresses several key scenarios:
Main protections:
Emergency services: Patients can't be billed out-of-network rates for emergency care, even at out-of-network hospitals
Out-of-network providers at in-network facilities: When you go to an in-network hospital but receive care from an out-of-network doctor (like an anesthesiologist or radiologist), you're only responsible for in-network cost-sharing
Air ambulance services: Protects against surprise bills from out-of-network air ambulance providers
How it works:
Patients pay only their in-network deductible, copayment, or coinsurance amount
Healthcare providers and insurers must resolve payment disputes through an independent dispute resolution process
Providers must give advance notice and obtain consent before providing non-emergency out-of-network care
Additional requirements:
Healthcare providers must provide good faith cost estimates for scheduled services
Patients have rights to receive information about their coverage and provider networks
The law was a bipartisan effort to address a major consumer protection issue, as surprise medical bills were affecting millions of Americans who thought they were receiving in-network care but later received unexpected, often very expensive, bills from out-of-network providers.