The No Surprises Act: What It Means for Your Medical Practice’s Revenue

Introduction

Surprise medical bills have been a longstanding issue for patients and healthcare providers alike. Many patients have faced unexpected out-of-network charges, leading to financial distress and increased disputes with providers. To address this, the No Surprises Act (NSA) was signed into law as part of the Consolidated Appropriations Act of 2021, going into effect on January 1, 2022. While the legislation aims to protect patients from surprise bills, it also introduces new compliance and financial challenges for medical practices. Understanding the Act’s impact is crucial to ensure revenue cycle efficiency and compliance.

Understanding the No Surprises Act

The No Surprises Act primarily addresses out-of-network billing practices, ensuring that patients are not burdened with unexpected medical bills when receiving emergency care or services from out-of-network providers at in-network facilities. Key provisions include:

1. Balance Billing Protections: Patients cannot be billed for the difference between the provider’s charge and the insurance reimbursement in covered scenarios.
2. Independent Dispute Resolution (IDR) Process: A mechanism for providers and insurers to resolve payment disputes.
3. Good Faith Estimates (GFE): Healthcare providers must provide upfront cost estimates for uninsured or self-pay patients.
4. Emergency Services Coverage: Emergency care must be billed at in-network rates, regardless of the provider’s network status.
5. Continuity of Care Requirements: Patients receiving ongoing treatment from an out-of-network provider due to network changes must be allowed to continue treatment for a limited time at in-network costs.

How the No Surprises Act Affects Medical Practice Revenue

While the NSA benefits patients by preventing unexpected medical costs, it poses several challenges for medical practices, potentially impacting revenue and cash flow. Below are the key areas of concern:

1. Restrictions on Balance Billing

Before the NSA, out-of-network providers could bill patients directly for the unpaid balance after insurance reimbursement. Now, in applicable cases, they must accept the Qualifying Payment Amount (QPA) set by insurers, often leading to lower reimbursements.

• Revenue Impact: Lower reimbursements can strain financial performance, particularly for specialties heavily reliant on out-of-network billing (e.g., anesthesiology, emergency medicine, radiology).
• Mitigation Strategy: Renegotiate payer contracts to improve reimbursement terms and explore new revenue models like value-based care.

2. Increased Administrative Burden

Medical practices must now comply with the Good Faith Estimate (GFE) requirements for self-pay and uninsured patients, detailing expected service costs.

• Revenue Impact: Additional administrative tasks increase operational costs, requiring more staff time and resources for compliance.
• Mitigation Strategy: Implement automated cost estimation tools within EHR systems to streamline GFE calculations and reduce administrative strain.

3. Payment Delays Due to Dispute Resolution

The Independent Dispute Resolution (IDR) process allows providers to challenge insurer payment amounts, but the process can be time-consuming and uncertain.

• Revenue Impact: Extended payment timelines may disrupt cash flow and financial planning.
• Mitigation Strategy: Establish a proactive claims review process to flag potential underpayments before submitting disputes.

4. Compliance Penalties & Legal Risks

Failure to comply with NSA regulations can lead to significant fines (up to $10,000 per violation) and legal disputes.

• Revenue Impact: Compliance violations can result in hefty fines, reputational damage, and potential exclusion from payer networks.
• Mitigation Strategy: Conduct regular compliance audits and staff training to ensure adherence to NSA requirements.

Best Practices for Adapting to the No Surprises Act

To mitigate financial risks and ensure compliance, medical practices should adopt proactive strategies. Here’s how:

1. Strengthen Front-End Revenue Cycle Processes

• Implement robust eligibility verification systems to determine patient coverage status upfront.
• Use automated GFE tools to generate cost estimates efficiently.
• Improve patient communication regarding financial responsibilities before services are rendered.

2. Optimize Payer Negotiations & Contracting

• Review existing payer contracts and negotiate improved reimbursement rates.
• Consider joining payer networks if out-of-network billing is significantly impacted.
• Advocate for fair QPA determinations through data-driven negotiations with insurers.

3. Improve Claim Management & Dispute Resolution

• Establish a dedicated claims review team to analyze underpaid claims and decide when to use the IDR process.
• Maintain detailed documentation for all disputed claims to strengthen appeals.
• Track insurer payment trends to anticipate potential issues before disputes arise.

4. Train Staff on Compliance & Billing Changes

• Provide regular NSA compliance training for billing and coding teams.
• Ensure clinical staff understand documentation requirements to support accurate GFE estimates.
• Stay updated on regulatory changes through CMS and industry resources.

5. Leverage RCM Technology & Outsourcing

• Utilize AI-driven revenue cycle management (RCM) platforms to enhance claim accuracy and compliance monitoring.
• Consider outsourcing medical billing and compliance management to experts like AllegianceRCM, ensuring optimized reimbursement strategies while reducing administrative burdens.

Conclusion

The No Surprises Act represents a major shift in medical billing, requiring healthcare providers to adapt to new regulations while maintaining financial stability. While the Act limits certain revenue streams, proactive strategies such as contract renegotiation, RCM automation, and compliance training can help mitigate risks and ensure sustainable operations.

By staying ahead of regulatory changes and optimizing revenue cycle management, medical practices can minimize revenue disruptions and continue delivering high-quality patient care.

Is your practice struggling with No Surprises Act compliance and revenue impact? Contact AllegianceRCM today to streamline your revenue cycle and maximize reimbursements!