The No Surprises Act was made to protect patients from paying extra charges from out-of-network providers. This mainly applies to emergency services, follow-up care, and some non-emergency services given by out-of-network providers at in-network places. The law stops patients from getting bills that are higher than expected. It puts the job of handling payment agreements and disputes on healthcare providers and insurance companies.
Since the law started, healthcare providers have much more paperwork to do. They must check billing often, use correct codes, communicate with patients, and add more documents. Providers also have to make good faith estimates (GFEs) for patients who do not have insurance or pay themselves before treatment. Billing systems need to be updated to protect patients.
From April 2022 to June 2023, more than 490,000 payment disputes were sent through the Independent Dispute Resolution (IDR) process. This number is much higher than the expected 22,000 cases. By June 2023, about 61% of these cases were still not solved. This has caused delays in payments for many providers. The large number of cases has slowed down the payment and billing process. Staff who work with revenue cycle management (RCM) have been very busy handling both daily billing and these complicated disputes.
The financial effects of the No Surprises Act and the dispute process are serious. One result is an 84% increase in healthcare bankruptcies from 2021 to 2022. Some hospitals and healthcare companies say the law made their money problems worse. They also face other money issues like rising debt and bad contracts with payers.
Another problem is that payments are often delayed because of long disputes. Many groups are unsure when many out-of-network claims are waiting in the IDR system. This delay makes it harder to manage money. Also, the payment rates set by the law are often lower than older out-of-network payments. This can lower overall income.
The IDR process needs providers and insurers to try to agree on payments privately for 30 business days before going to arbitration. If they cannot agree, an arbitrator chooses one payment offer that must be accepted. But this process is complicated. Providers must correctly do all steps to avoid losing their cases.
More than 40% of IDR cases were challenged as not eligible. Errors included sending cases to the wrong systems, breaking batching rules, or missing deadlines. Only about 7% to 11% of cases had payment decisions made by late 2022. This shows the process is slow and not very efficient.
The IDR cases are not spread out evenly. Around two-thirds come from six southern states: Texas, Florida, Georgia, Tennessee, North Carolina, and Virginia. Tennessee had the highest number of cases per person. Also, few companies like SCP Health, R1 Revenue Cycle Management, and LogixHealth filed half of all cases. These companies often focus on emergency department billing and have private equity backing.
The No Surprises Act has made healthcare providers change how they handle revenue cycle tasks. Medical leaders and IT managers must meet the law’s rules while keeping operations efficient and money stable.
One way to respond is to rethink being part of health plan networks. Being in-network lowers the chance of billing disputes and lessens administrative work related to the NSA. Providers who have more in-network agreements may get more patients and have fewer billing complaints since patients do not get surprise bills.
Baker Tilly, a consulting group, suggests hospital providers and specialists look at their in-network status, especially in fields like anesthesiology and radiology. Having more in-network agreements helps match income with payments and stops costly denials or appeals.
The strict NSA rules mean billing and coding mistakes cost a lot. Studies say providers lose about $36 billion each year because of coding errors, denials, and fines. Payers’ rules are more complex. There were over 100,000 rule changes between 2020 and 2022. Providers need strong internal checks and ongoing staff training to cut down errors.
Revenue reconciliation must be more precise to find and fix payment mistakes fast. This helps with planning money flow and avoids surprise changes later that can impact income and operations.
Following the NSA needs skilled revenue cycle workers trained for new tasks like managing disputes, negotiating with payers, and making good faith estimates. But many places have staff shortages in billing and coding, which makes this harder.
Many organizations have formed specialized teams with NSA skills and invested in technology to automate parts of the work. FTI Consulting says that using focused payer strategies and scalable technology helps handle many claims, cut administrative costs, and improve negotiating power.
As revenue cycle work gets more complex and larger, automation and AI are very important tools for healthcare providers to meet NSA rules.
Automation tools like robotic process automation (RPA) and AI systems can do repeat but time-consuming tasks in revenue cycle. These tasks include eligibility checks, claim submissions, payment postings, and coding help. This reduces staff workload and lets people focus on harder tasks like disputes and patient communication.
For example, automated systems quickly handle machine-readable price transparency files required by CMS and find mistakes to fix. Automation also helps check eligibility in real time, lowering claim denials caused by coverage errors, which often adds to admin work.
AI helps with coding accuracy by comparing medical records with payer rules and pointing out errors before sending claims. This lowers costly denials and compliance problems. Also, analytics platforms show important data like Days in Accounts Receivable and denial rates. This helps make decisions based on data and find problems early.
With more patients having high-deductible health plans, providers need better billing transparency and easier payment ways. AI-powered patient portals in RCM systems let patients see bills clearly, offer flexible payment plans, and get cost estimates before treatment. This fits the NSA’s good faith estimate rules.
Simbo AI is one company using AI for front-office phone automation. It helps providers deal with many patient calls about billing, coverage, and appointments. Automating common calls improves patient experience and allows staff to focus on more complex issues.
Jerris Heaton from ChartLogic, a company that gives IT solutions for ambulatory care, says many providers don’t use RCM data analytics well. They miss chances to make billing cycles faster. Heaton says that RCM automation and real-time analytics are key to managing changing rules like the NSA.
Baker Tilly notes that healthcare providers who use automated compliance tools and do frequent reviews of operations reduce billing errors, improve claim approval rates, and handle disputes better.
FTI Consulting worked with a national provider and found that focusing on key payers, using strong technology platforms, and hiring trained revenue cycle staff improved results in IDR cases and payer contracts.
The No Surprises Act protects patients better but has made revenue cycle work harder for healthcare providers in the United States. Providers who use focused strategies, train staff well, and apply technology solutions will better follow rules, keep financial health, and support good patient care.
The foundational purpose of regulations is to protect patients and ensure quality care. Without regulations, a healthcare system could become catastrophic.
Providers spend close to $39 billion a year on administrative tasks to support compliance, equating to about $1,200 per patient admission.
Price transparency requires hospitals to post rates for services, impacting their revenue model and necessitating clear communication with patients regarding their financial responsibilities.
Providers must ensure that the coding of diagnoses, procedures, and data complies with all relevant rules, laws, and guidelines to avoid significant financial losses.
Non-compliance with coding can lead to an estimated $36 billion in annual lost revenue due to denials and fines.
The No Surprises Act mandates that teams must identify patient encounters that qualify for protections against surprise billing, requiring diligent tracking and billing processes.
Technologies such as AI and robotic process automation can improve coding accuracy and streamline revenue cycle processes, helping to mitigate compliance issues.
Outsourcing can provide access to more resources and expertise, enabling quicker adaptation to regulatory changes and improving compliance efforts for providers.
Many RCM teams struggle with personnel shortages, making it difficult to maintain adequate resources with the necessary expertise amid growing regulatory demands.
Effective compliance helps healthcare providers avoid operational headaches and financial ramifications, ultimately supporting greater revenue stability and patient satisfaction.
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