When Health Insurance Isn't Enough: How The No Surprises Act Works To Protect Patients

21 hours ago

12 min read

Shannon W. Conway*

ISSUE 19

SPRING 2026

HEALTH LAW

*To see the supplemental infographic for this article, click here.*

Introduction

Health Insurance Is Not Insurance As Most People Understand It

Health insurance, as defined by the Centers for Medicare & Medicaid Services (CMS), is “a legal entitlement to payment or reimbursement for your health care costs, generally under a contract with a health insurance company” and is intended to provide “important financial protection in case you have an accident or sickness.”¹ Most people understand this to mean that they will be protected against unexpected healthcare costs so long as they purchase a health insurance plan, either through employer or as a self-insured. This is generally how auto, homeowners’, and renters’ insurance work, and how health insurance is commonly marketed.² Yet for too many Americans, their experiences with health insurance work very differently. Services are denied, insurance companies deny treatments recommended by health care providers, and, perhaps most frustrating (and frightening) of all, patients receive surprisingly enormous medical bills from providers far too often.

Consider the plight of Dr. Lauren Hughes in Denver, Colorado. Dr. Hughes, a family physician, was injured in a car accident while on her way to tend to patients at a clinic located approximately 20 miles from her home.³ Emergency medical personnel sent her by ambulance to the closest hospital, where she was diagnosed with bruising, a cut on her knee, and a broken ankle.⁴ The hospital’s surgeons told her they needed to wash the “gaping wound” on her knee to ensure there would be no infection.⁵ Her broken ankle also had to be addressed, so surgeons realigned a broken bone, stabilizing it with metal screws.⁶ She was then admitted for an overnight stay, and a friend took her home the next day.⁷

The hospital providing these medical services was not “in-network” under the insurance plan to which Dr. Hughes subscribed through her employer.⁸ She received a final bill in an amount over $63,000 for the treatment received during her overnight stay at the hospital, including: i) over $3,000 for general anesthesia; ii) over $12,000 for CT scans; iii) over $9,000 for the emergency room overnight stay (plus $1,484 for the recovery room, $3,927 for “room & board”, and $6,200 for the “trauma response”); iv) nearly $18,000 for operating room procedures; and v) the balance made up of various medical supplies, lab work, pharmaceuticals, and radiology services.⁹

Dr. Hughes’ health insurance covered the nearly $2,400 ambulance ride and some of the radiology charges. Still, it denied the surgery and overnight stay charges from the out-of-network hospital.¹ ⁰ The insurance company also notified her that, after consulting its clinical guidelines for her type of ankle repair, Dr. Hughes’ admission for an inpatient stay was not medically necessary.¹¹ According to the insurance company, an inpatient stay may have been warranted if Dr. Hughes had needed additional surgery or had experienced vomiting or fever, but the information it had “did not show [she had] these or other severe problems.”¹² When she asked for more information, the insurance company directed Dr. Hughes to her benefit booklet, which stated that for a hospital stay, documentation must show “safe and adequate care could not be obtained as an outpatient.”¹³

Dr. Hughes appealed the denied claims and sought the help of her employer’s human resources department, which contacted her insurance company.¹⁴ She also reached out to a health news source, which contacted both the insurance company and the hospital, in an effort to reach a resolution on her behalf.¹⁵ Ultimately, after many stressful months of time-consuming self-advocacy, Dr. Hughes was responsible only for her $250 copayment, and the hospital resubmitted a reduced bill to the insurer, which refused to pay all but $21,000.¹⁶

Before 2022, Dr. Hughes’ situation was not unusual. If a patient with health insurance received care from an out-of-network provider or an out-of-network facility, even unknowingly, their health plan may not have covered the entire cost. This left patients with higher costs than if they got care from an in-network provider or facility, and they were often billed for the difference between the amount charged by the provider and the amount their health plan paid, unless such practice was banned by state law.¹⁷ This practice is called “balance billing,” and the bill with an unexpected balance from a patient’s out-of-network provider might also be called a “surprise medical bill”.¹⁸

These experiences are conveniently framed as misunderstandings between insurance companies and medical providers or facilities, as problems that would just have to be worked out later. Sadly, until such “misunderstandings” are cleared up—often by the patient through dogged communication with their health insurance company and medical providers—patients are forced to pay surprise medical bills and then seek reimbursement from their insurance companies, a battle not often won by patients.¹⁹ But in 2021, Congress enacted the No Surprises Act (the “NSA”) to establish federal protections against surprise medical billing.²⁰ The NSA went into effect in January 2022 and has since provided patients with significant protection against surprise billing.²¹

This article is comprised of three parts. Part I briefly explains how health insurance differs from more traditional insurance. Part II discusses the No Surprises Act and explains its formidable attempt at resolving the problem of surprise medical (or balance) billing. Lastly, Part III attempts to provide patients with a guide to navigating the Act.

I. What "Insurance" Traditionally Means and How Health Insurance Differs

Fundamentally, insurance is a contract between an insurer and an insured. The insurer agrees to indemnify the insured against specified risks in exchange for consideration (the premium). An essential characteristic of insurance is the transfer and distribution of risk among a large group of similarly situated parties,²² so that when a loss occurs—such as a house fire or car accident, in the context of home or auto insurance—the financial consequences of such an event are borne by the insurer rather than the individual insured.

All types of insurance involve similar terms such as premiums, coverage, and deductibles. Consumers thus understandably assume that their health insurance plans will shield them from catastrophic medical costs just as their home and auto insurance policies typically do for house fires, hail damage, or car accidents. This is a reasonable assumption for health insureds, especially those who believe they are following all the rules, seek care at in-network facilities, and cannot choose their providers. For many people, however, this is not the case.

Health insurance just does not work the same. A health insurance company does not actually indemnify its insureds; rather, it manages payment for insureds’ medical services through various administrative controls, cost-sharing mechanisms, and private contracts between insurance companies and medical providers.²³ This structure has provided a breeding ground for surprise medical bills. Patients can do everything “right”—they can seek care from in-network providers, obtain in-network referrals to specialists, and choose in-network hospitals and clinics, when at all possible, yet they can still receive expensive bills from out-of-network providers. These surprise medical bills typically occur in two situations: 1) the patient is confronted with a medical emergency and, for myriad reasons, has no choice but to visit an out-of-network facility for emergency care; or 2) the patient seeks care from in-network providers and in-network facilities, but nevertheless receives bills from out-of-network providers that happen to be operating within in-network facilities.²⁴ Thus, these surprise medical bills are not the result of patient choice or patient misconduct, but rather the product of a health plan system in which insurance is intended more to govern payment management rather than patient protection.

II. The NSA Is a Step Toward a Resolution

Recognizing that patients cannot meaningfully negotiate, consent to, or avoid some out-of-network charges—especially in situations of emergencies and facilities-based care (i.e., seeing an in-network doctor practicing within a particular hospital system who then refers a patient for blood work or a diagnostic procedure which is then performed by an out-of-network provider)—Congress enacted the No Surprises Act on December 27, 2020.²⁵

The NSA’s provisions were intended to “help protect consumers from surprise bills beginning January 1, 2022” and created requirements, including prohibitions on balance billing for certain services, notice and consent requirements, and requirements for disclosures to consumers about balance billing protections.²⁶ It prohibits out-of-network providers from balance billing for three categories of medical services: 1) emergency services; 2) non-emergency services at in-network facilities; and 3) air ambulance services.²⁷ In emergencies, the NSA protects patients until their “condition is stabilized and the patient is able to understand and consent to be transferred to an in-network facility.”²⁸

The NSA’s surprise billing protections generally do not apply when: 1) non-emergency services are provided to a patient during a visit to an out-of-network facility; 2) a provider or facility provides notice to the patient and obtains their consent to waive the NSA protections; 3) the services are not covered by the patient’s health plan or insurance; or 4) ground ambulance services are used.²⁹

But rather than “fixing” the entire health insurance model, the NSA simply removes patients from certain disputes they are typically unable to manage.³⁰ So the NSA effectively shifts any disputes over payment for certain medical services away from patients, resolving them between health insurers and medical providers through a regulated dispute-resolution process.³¹ In other words, the NSA does not convert health insurance into traditional insurance—it does not rid the system of the problems arising with in-network and out-of-network requirements, but it does tend to restore one of the core insurance principles by implementing a structure where the financial uncertainty that accompanies certain unavoidable and unpredictable risks is absorbed by health insurance plans (or medical providers) rather than the health insured.

III. A Consumers' Guide to Navigating the No Surprises Act

As with most enacted legislation, the NSA can be difficult to understand – especially from the perspective of consumers or patients who are dealing with a surprise medical bill and who wish to know whether the NSA provides them with any protection. Fortunately, there are several resources available to help guide patients and their advocates through the process of determining whether and how the NSA protects them from a surprise medical bill. These resources include the Centers for Medicare & Medicaid Services (www.cms.gov), most states’ health or insurance departments (i.e., the Texas Department of Insurance (www.tdi.texas.gov)), and many health systems (i.e., UT Southwestern Medical Center (www.utswmed.org). The guide provided below is largely based on these resources.

Does the No Surprises Act Apply?

The NSA may apply if a patient has one of the following types of health insurance plans: i) employer-based group health plans; ii) individual or group health plans; iii) non-federal governmental plans that are sponsored by state and local government employees (i.e., a health plan acquired through a school district or the Teacher Retirement System (TRS) of Texas); iv) certain church plans; v) health plans offered through the Federal Employees Health Benefits (FEHB) program; and vi) student health insurance plans offered by most colleges and universities.³²

The NSA’s protections do not apply to patients who have health coverage or receive services provided by the following programs: i) Medicare; ii) Medicaid; iii) Indian Health Service; iv) Veterans Affairs Health Care; or v) the insurance programs within TRICARE.³³

What Protections Does the No Surprises Act Provide?

In general, the patients to whom the NSA applies are protected from surprise billing for:

1. Most emergency services (including emergency mental health services). The NSA’s definition of “emergency services” generally describes a medical condition (including a mental health condition) with symptoms severe enough that anyone with average knowledge of health and medicine would reasonably expect that failure to get immediate medical care could jeopardize their health.³⁴

2. Qualifying non-emergency services. If an out-of-network medical provider provides non-emergency services as part of a patient’s visit to certain types of “participating health care facilities,” the NSA’s protections generally apply unless the out-of-network provider provided a notice of waiver of rights and received consent from the patient.³⁵

The “participating health care facilities” referenced above include: i) hospitals; ii) hospital outpatient departments; iii) ambulatory surgical centers; and iv) critical access hospitals.³⁶

Examples of non-emergency services include (but are not necessarily limited to) pre-operative and post-operative services; equipment and devices; and telemedicine services, and may be provided by physicians, physician assistants, nurse practitioners, laboratories, and hospitalists, among other types of providers.³⁷

3. Air ambulance services. The NSA also protects against surprise billing (or balance billing) from out-of-network providers of air ambulance services.³⁸ It is important to note that this protection does not apply to ground ambulance services.³⁹

What is the Notice and Consent Exception?

Under the NSA, a medical provider or facility can ask patients to voluntarily waive the NSA protections when: i) the patient schedules certain non-emergency services at an in-network healthcare facility; or ii) the patient needs post-stabilization care after an emergency, and the provider or facility is out-of-network.⁴⁰ The Department of Labor provides the following example:

You sustained a shoulder injury while playing football. An X-ray shows your shoulder is both broken and dislocated. A colleague recommends an orthopedic surgeon. Your surgery is scheduled 2 weeks in advance at an in-network hospital.

The same day you schedule your surgery, you receive a notice informing you that your surgeon is not part of your health plan’s network. To proceed with surgery, you must consent to waive your balance billing protections. Due to your preference for this [surgeon], you sign the consent form.

You are liable for any balance bill you receive. You signed the consent form acknowledging that your surgeon was out of network more than 72 hours before your surgery date.

However, if the surgeon had not provided you the consent form within the minimum 72 hours before the services, the surgeon could not balance bill you for the services provided during your surgery.⁴¹

In emergencies, the notice-and-consent exception does not apply to emergency services provided before the patient’s condition is stabilized.⁴² And in non-emergency situations the exception does not apply to ancillary services, which are defined to include: i) medical services related to emergency medicine (anesthesiology, pathology, radiology, neonatology); ii) diagnostic services; iii) services provided by an out-of-network provider if there is no in-network provider available; iv) and services provided during treatment due to unforeseen, urgent medical needs.⁴³

Patients do not have to sign the notice and consent form.⁴⁴ It is entirely the patient’s choice, and a patient should only sign the form if they agree to give up the NSA’s surprise billing protections.⁴⁵ However, if a patient does not sign, the medical provider may decide not to provide the non-emergency or post-stabilization care included in the notice.⁴⁶ Patients should therefore read the form carefully and weigh their options before signing.⁴⁷

Explanations of Benefits (EOBs) vs. Surprise Medical Bills

Generally, before a patient receives a bill from a medical provider’s office, they should receive an Explanation of Benefits (EOB) (which is not a bill) from their health insurance plan. The EOB should describe what services the patient received, how much the insurance plan will pay, and how much the patient owes.

Patients should compare the bill received from the medical provider’s office against the EOB, and the NSA should protect them from any difference between the two amounts. If the medical provider’s bill is for an amount higher than what the patient’s EOB reflects is owed, then patients should contact the medical provider’s billing office, preferably in writing, to request that they correct the amount owed. If that does not work, the patient should contact the No Surprises Help Desk at (800) 985-3059 or file an online complaint through the No Surprises Medical Bill Rights web page: https://www.cms.gov/medical-bill-rights.

Suggested Citation: Shannon Conway, When Health Insurance Isn't Enough: How The No Surprises Act Works To Protect Patients, ACCESSIBLE LAW, Spring 2026.

Sources:

*Shannon W. Conway is an Adjunct Professor of Law at UNT Dallas College of Law. Outside of UNT Dallas, Professor Shannon Conway continues to actively practice law as Senior Counsel at Platt Richmond PLLC.

[1] Health Insurance Basics, CMS, https://www.cms.gov/files/document/nsa-health-insurance-basics.pdf (last visited Feb. 7, 2026).

[2] See, e.g., Affordable Health Insurance, First Fam. Ins., https://www.firstfamilyinsurance.com/content/firstfamilyinsurance/us/en/home/health-insurance.html (last visited May 5, 2026) (“Health coverage helps protect you and your family from unexpected medical expenses.”).

[3] Julie Appleby, Doctor Tripped Up by $64k Bill for Ankle Surgery and Hospital Stay, KFF Health News (Oct. 29, 2025), https://kffhealthnews.org/news/article/doctor-ankle-surgery-hospital-stay-surprise-bill-of-the-month-october-2025.

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] Id.

[11] Id.

[12] Id.

[13] Id.

[14] Id.

[15] Id.

[16] Id.

[17] No Surprises: Understand Your Rights Against Surprise Medical Bills, CMS, https://www.cms.gov/newsroom/fact-sheets/no-surprises-understand-your-rights-against-surprise-medical-bills (last visited Feb. 18, 2026).

[18] Id.

[19] See id.

[20] No Surprises Act, Pub. L. No. 116-260, 134 Stat. 1182 (2020).

[21] Id.

[22] See In re Tex. Ass’n of Sch. Bds., Inc., 169 S.W.3d 653, 658 (Tex. 2005).

[23] See AG Equip. Co. v. AIG Life Ins. Co., Inc., 691 F. Supp. 2d 1295, 1302 (N.D. Okla. 2010) (a “standard health insurance plan pays benefits directly to the insured employee or the employee’s medical provider, and state laws generally prohibit a health insurer from issuing payment to the employer on behalf of the employees.”).

[24] See Zach Cooper, Fiona Scott Morton, Nathan Shekita, Surprise! Out-of-Network Billing for Emergency Care in the United States, Nat’l Bureau of Econ. Rsch., NBER Working Paper No. 23623 (2017), https://www.nber.org/system/files/working_papers/w23623/revisions/w23623.rev1.pdf, at p. 2; Joseph Bernstein, Not the Last Word: Surprise Medical Bills are Hardly Charitable, Nat’l Libr. of Med. (Sept. 9, 2020), https://pmc.ncbi.nlm.nih.gov/articles/PMC7491885.