No Surprises Act Interim Final Rule: Understanding the Implications


On July 13, 2021, the U.S. government published the “No Surprises Act – Requirements Related to Surprise Billing; Part 1 Interim Final Rule (IFC).” The IFC is the first in a series of rules enacted by Consolidated Appropriations Act, 2021 (CAA) and is focused on Division BB: Private Health Insurance and Public Health Provisions;  Title 1 – No Surprises Act to restrict excessive out-of-pocket costs resulting from surprise billing and balance billing.  

Generally, the IFC applies to group health plans and individual and group health insurance issuers (e.g., self-insured, fully insured, market), carriers under the Federal Employees Health Benefits (FEHB) Program, health care providers and facilities and air ambulance service providers. Programs including Medicare, Medicaid, TRICARE Veterans Affairs Health Care, or Indian Health Services already have provisions prohibiting balance billing.  

The IFC is applicable beginning on or after January 1, 2022, depending on policy or contract effective dates, and on January 1, 2022, for health care providers, facilities, and air ambulance providers. 

The IFC addresses the following provisions of the No Surprises Act1:

  • Requires group health plans, group and individual health insurance issuers, carriers of FEHB programs to implement protections against balance billing and out-of-network cost sharing for:
    • Emergency services 
    • Non-emergency services rendered by non-participating (par) providers at specific facilities (e.g., par facilities)
    • Air-ambulance services by non-par providers
  • Prohibits non-par providers, health care facilities and air ambulance providers from balance billing (e.g., unless disclosure and consent procedures are satisfied)
  • Requires health care facilities and providers to disclose federal and state patient protections from balance billing and consent procedures; insurers and plans have similar disclosure requirements 
  • Extends applicability of patient protections in the No Surprises Act to grandfathered plans
  • Establishes complaints process for violations

Payer Implications

Depending on benefit coverage and services rendered, the IFC rule is relevant for medical payers, third party administrators and delegated vendors and ancillary services (pharmacy, dental, behavioral health, etc.), among others.  

#1 – Applicable plans providing any emergency services benefits are required to cover such services according to the following:

  • Without any prior authorization 
  • Regardless of network status of the health care facility, health provider or air ambulance provider
  • Extends emergency services to include:
    • Those provided by independent free standing emergency departments licensed to provide emergency services
    • Certain pre- and post-stabilization items and services
  • Cannot impose administrative requirements or limitations for emergency services received from non-par providers and facilities less favorably than if in network
  • Even if there are any other terms or conditions of the plan or coverage (e.g., dependent pregnant enrollee).  This excludes coordination of benefits, a permitted affiliation, or a waiting period

#2Cost sharing limits must be limited according to the following:

  • Includes out-of-network emergency services, air ambulance services rendered by non-par providers and certain non-emergency services rendered by non-par providers at certain par facilities (e.g., hospitals and ambulatory surgical centers)
  • Cost sharing cannot exceed in-network amounts
  • Requires cost sharing for such services to count toward in-network deductions and out-of-pocket maximum amounts
  • Prohibits balance billing
  • Must be calculated based on one of the following amounts: 
    • An amount determined by an applicable All-Payer Model Agreement under section 1115A of the Social Security Act
    • If there is no such applicable All-Payer Model Agreement, an amount determined under a specified state law
    • If neither of the above apply, the lesser amount of either the billed charge or the qualifying payment amount, which is generally the median contract rate of the plan or issuer 

#3 – Requires plans and insurers to disclose information on items and services covered by the No Surprises Act as follows:

  • Publicly available, posted on the insurer/plan’s public website and included on advanced explanation of benefits (A-EOB) 
  • Requirements and prohibitions applicable under sections 2799B-1 and 2799B-2 of the Public Health Service Act (PHSA) 
  • Include applicable state requirements for out-of-network balance billing 
  • Provide instructions for how to contact appropriate state and federal agencies if the individual believes the provider or facility has violated the requirements described in the notice

Key step:  Assessing implementation readiness requires an understanding of current state for internal and delegated processes and technology.  All relevant processes, technology and documentation such as websites, policies, internal standard operating procedures, provider and member portals, member rights and responsibilities, provider manuals, training guides, contracts, summary of benefits and coverage documents, call center scripts, internal training manuals and broker resources may give rise to potential readiness gaps or departures from the IFC. 

Other examples to consider as part of implementation readiness include assessing: 

  • Whether emergency services described above are subject to prior authorization requirements, retrospective reviews and pre-certification/direct admit from emergency department 
  • If coverage of emergency services is restricted depending on place of service (e.g., urgent care, out-of-network facilities, and place of service (e.g., Urgent Care, Independent Emergency Standalones) 
  • Whether the definitions vary from those prescribed in the IFC (e.g., single case agreements are considered “par”)
  • If claims systems or processes will appropriately process emergency services in accordance with the IFC (e.g., place of service codes, network status, manual adjudication or auto denial based on codes) and auto adjudication workflow for emergency services 
  • If cost sharing calculations require modification to align with one of the three options under the IFC
  • Explanation of benefit updates to include individual disclosure by line item
  • Up and down stream impacts internally and with delegated vendors

Provider and Facility Implications

Depending on services rendered, type of provider or facility and network status, the IFC rule is relevant for health care providers, facilities, and providers of air ambulance services and ancillary services (pharmacy, dental, anesthetics, etc.), among others.  

#1 – Requires health care facilities and providers to disclose federal and state patient protections from balance billing (not applicable to air ambulance providers).  Disclosure requirements are the same as payer requirements outlined in #3 above, except individuals are notified using a one-page notice.  

#2Informed consent must be obtained prior to rendering certain non-emergency and stabilization services provided in the context of emergency care where balance billing and cost sharing restrictions may not apply.  

Procedures to obtain informed consent should be developed according to the following:

  • Must notify the participant, beneficiary or enrollee for such services at least 72 hours before the appointment date; same day for appointments scheduled within 72 hours of appointment date
  • Must convey network status and estimate of cost 
  • Must be documented using the standard consent form specified by the government
  • Consent forms must be completed in full and voluntarily signed by individual capable of understanding information and how it impacts them

The Centers for Medicare and Medicaid Services (CMS) issued model forms (CMS-10780) for notice, consent and opt-out requirements to satisfy these requirements. 

Technology Implications

Because the IFC falls within the definition of “significant regulatory action,” the government supplied estimated costs in the IFC (p. 36918, Economic Impact and Paper-work Burden) and costs for technology related requirements rose to the top.  

It is a given that technology impacts be assessed at the individual requirement level and enterprise wide.  General examples where technology related requirements may prove significant include:

  • Cost sharing and qualifying payment amount (QPA) calculations 
  • System integration with vendor systems, data warehouses, interdependent applications and platforms, and other data sharing partners
  • Member and provider portals and mobile apps that accumulate and display deductible and out-of-pocket accumulators
  • Utilization management and claims platform application changes including integration 
  • Updates to existing Application Programming Interfaces (APIs)
  • Provider Data Management platforms (fee schedules and contract updates)
  • Updates to fulfillment and print vendor applications (member materials, ID cards, summary of plan benefits, etc.)

Impending Rule Issuance and Non-compliance Implications

Expect to see a flurry of activity over the next several months as additional rule-making requirements are published to operationalize the Independent Dispute Resolution (IDR) process, QPA methodology, price comparison tools, audit and reporting requirements. Next will be transparency in member identification cards, continuity of care, provider directory and network status accuracy, gag clause ban and pharmacy benefit and drug cost reporting.   

Regardless of when guidance is published, they are effective as of January 1, 2022.  

The United States Department of Health and Human Services (HHS) has the authority to impose civil money penalties when facilities and providers violate the No Surprises Act balance billing requirements.  To help ensure compliance, non-participating providers should determine whether the services or items they provide would trigger these protections.

In addition, the HHS Secretary has the authority to waive penalties when a health care provider, facility or provider of air ambulance services unknowingly violates and would not have reasonably known it violated the No Surprises Act provisions. In these instances, the provider or facility must withdraw the bill in violation within 30 days of that violation and reimburse the amount equal to the difference between the amount billed and the amount allowed for that bill, including interest, to the applicable health plan or individual. The HHS Secretary determines the interest rate. 

In future rulemaking, HHS intends to address enforcement of the requirements of the No Surprises Act applicable to health care providers, facilities and providers of air ambulance services.

Closing thoughts

The IFC is voluminous and there is much more to come over the next five years as all healthcare related provisions of the CAA are addressed. Until rulemaking to fully implement the provisions are finalized and effective, impacted health care entities are expected to implement the requirements using a good faith, reasonable interpretation of the statute. Expectations related to good faith compliance of the provisions are scheduled to be issued soon.

How Emids can help

The Emids consulting practice is ready to help you navigate the path to evaluate, design and implement a custom compliance solution with a broad range of payer and provider services. Contact us today to find out how we can help.


  1. Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations; #36872 – 36969 (Federal Register Link)
  2. CMS Fact Sheet, July 1, 2021: Requirements Related to Surprise Billing; Part I Interim Final Rule with Comment Period filed on July 1, 2021


Advanced Explanation of Benefits (A-EOB); Application Programming Interfaces (APIs); Centers for Medicare and Medicaid Services (CMS); Consolidated Appropriations Act (CAA); Federal Employees Health Benefits (FEHB); United States Department of Health and Human Services (HHS); Independent Dispute Resolution (IDR); Interim Final Rules with Request for Comment (IFC); No Surprises Act (NSA); Office of Personnel Management (OPM); Participating (par); Public Health Service Act (PHSA); Qualifying Payment Amount (QPA).

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