The No Surprises Act has largely succeeded in protecting patients, reportedly preventing nearly nine million unexpected medical bills since it took effect at the beginning of the year. For healthcare providers, however, the legislation has introduced complex revenue cycle and compliance challenges that are contributing to ongoing revenue cycle management loss driven by delayed reimbursements, disputed claims, and administrative inefficiencies. As organizations work to recover lost revenue and improve cash flow, many are turning to external expertise, including revenue cycle management and revenue maximization services, as well as IDR support offered by No Surprise Bill Support Team, to reduce financial leakage, resolve payment disputes, and strengthen long-term revenue performance.
Out-of-network reimbursement rates often favor insurers, while hospitals bear the responsibility of confirming accurate patient billing. Providers are also required to deliver good faith cost estimates, yet the system-to-system infrastructure needed to support this requirement remains insufficient or nonexistent.
Regulations designed to prevent surprise billing and balance billing have created a significant claims processing backlog. A large number of claims have been sent to the Independent Dispute Resolution process. According to the Department of Health and Human Services, approximately 90,000 claims were submitted in the first five and a half months after the IDR portal launched in April, far exceeding the volume initially projected for an entire year.
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For hospitals, the issue extends beyond legal disputes surrounding how the Qualifying Payment Amount is calculated for out-of-network services. While claims are under review in the IDR system, payments are delayed, leaving providers without timely reimbursement.
| No Surprises Act Challenge | Revenue Cycle Impact
The Impact of the No Surprises Act on Revenue Cycle Management |
Operational Concern |
| IDR claim backlog | Delays reimbursement for disputed out-of-network claims | Providers may wait extended periods for payment while disputes remain unresolved |
| Qualifying Payment Amount disputes | Creates uncertainty around expected reimbursement | Revenue cycle teams must track and manage disputed payment amounts |
| Balance billing restrictions | Requires accurate adjustment of patient balances | Inconsistent remittance coding can make it difficult to identify affected claims |
| Good faith estimates requirements | Adds administrative and compliance costs | Limited provider-to-provider data exchange makes accurate estimates difficult |
| Inconsistent insurer coding | Increases manual claim review | Staff may need to determine whether No Surprises Act protections apply |
| Compliance requirements | Creates potential financial and regulatory exposure | Hospitals must maintain workflows that meet federal billing and disclosure requirements |
Because of this backlog, reimbursement delays could stretch into years, said Amber Thomas, head of Regulatory Affairs and Regulatory Compliance at R1 RCM, a revenue cycle management services provider. Thomas works closely with legal teams that support healthcare organizations.
“We’ve been speaking directly with CMS about this,” Thomas said. “Claims subject to the No Surprises Act are sitting in an IDR backlog that could last for years. This reflects a serious policy failure.”
Another challenge is that some revenue cycle systems are not fully configured to comply with the mandate to stop balance billing. Prior to the No Surprises Act, balance billing was prohibited in some states but not nationwide. The federal rule also applies differently to self-insured employers compared with group health plans.
When a provider submits a claim, the health plan responds with payment along with codes indicating whether the claim is subject to balance billing restrictions. Ideally, an X12 remittance code would clearly explain why a claim was paid differently and identify that it falls under the No Surprises Act.
Revenue cycle teams could create workflows so that when staff see a specific code, they automatically remove the patient balance. However, insurers are not consistently using these codes.
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“Until there is meaningful enforcement or incentives for health plans, we won’t see consistent adoption,” Thomas said. “As a result, the burden of identifying and applying the rules falls on providers and hospitals.”
Why This Matter
Challenges tied to the No Surprises Act are having a substantial impact on revenue cycles, particularly for emergency physicians, anesthesiologists, and other clinicians who often practice as out-of-network providers within in-network facilities, Thomas said.
In response, many hospitals are partnering with vendors to strengthen workflows, reduce delays, and support long-term revenue cycle performance despite regulatory constraints.
For more insights into healthcare industry developments, health policy, and business trends, visit Texas Business Today’s Health section. Its healthcare coverage offers additional reading for organizations navigating regulatory changes, reimbursement challenges, and the evolving healthcare business landscape.
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According to the American Hospital Association, 2022 has been the most financially difficult year for healthcare executives since the start of the pandemic, largely due to rising labor costs. Thomas noted that the law has added administrative complexity at a time when health systems are already dealing with workforce shortages and burnout.
Thomas expects CMS to introduce changes in 2023 that make the No Surprises Act more workable for providers.
Healthcare organizations face penalties for failing to comply with balance billing rules and for not providing patients with good faith cost estimates. Many health systems lack the technical infrastructure needed to exchange data across disparate provider platforms to meet these requirements.
When the rule was finalized in 2021, CMS stated it would exercise enforcement discretion for good faith estimate requirements through the end of this year.
“I’m very optimistic that enforcement discretion will be extended,” Thomas said. “Federal agencies have acknowledged that there is no reliable infrastructure for provider-to-provider data exchange. Without it, delivering accurate good faith estimates is not realistic.”
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The Broader Trend
In August, HHS and other federal agencies released a final rule intended to clarify standards related to the Independent Dispute Resolution process. This process has remained a major point of contention for providers, who argue that it disproportionately favors insurer-defined Qualifying Payment Rates.
The Texas Medical Association has filed its third lawsuit challenging the IDR process and other provisions of the No Surprises Act.
About the Author: Written by the team at Earn SEO, a digital marketing agency specializing in SEO for pharmacies and healthcare businesses, helping healthcare providers improve their online visibility and reach audiences seeking information about healthcare services, regulatory compliance, and revenue cycle management.