Landmark Court Decision Alters No Surprises Act – But Keeps it Largely Intact

Providers are still required to provide patients with “good faith estimates” of charges.

A federal court ruled in favor of the Texas Medical Association’s challenge to a portion of the No Surprises Act (NSA). Thanks to their litigation, part of the NSA has been declared invalid. This article focuses on what did NOT change. 

The court’s ruling will not change the obligation for most of the healthcare industry to provide a good faith estimate to any patient who schedules a service three or more business days in advance, if the patient does not plan to use their insurance to pay for the claim. In other words, if the patient is uninsured or choosing not to use their insurance and scheduling something three or more days in advance, they need to get the good faith estimate. Similarly, the requirement to give patients a disclosure explaining their rights under the NSA remains unchanged.

There is another helpful fact that remains unchanged. The government has still not issued civil monetary penalties for the law. Right now, there is really only one real consequence of failing to comply with the No Surprises Act. A patient who is not using insurance to pay for their services can challenge the bill if you either fail to provide them with a good faith estimate, or the estimate is more than $400 too low. When the civil monetary penalties are issued, this will change, but in the meantime, failing to follow the law is not likely to result in serious consequences. 

I want to address a question from a longtime Monitor Mondays listener. She has expressed frustration getting information about Unified Program Integrity Contractor (UPIC) audits. When she contacts her Medicare Administrative Contractor (MAC), Noridian, to ask about the UPIC audits, she receives the reply, “no news is good news.” Yet she still asks, “what can we do about these UPIC audits?” 

It is a good question. I am about to go into battle with CoventBridge because they failed to apply the Two-Midnight Rule while auditing some of my clients. As we have discussed in the past, they claimed that patients who “only need an outpatient level of hospital care for more than two midnights are not eligible to be an inpatient.” The good news is that several of my clients who are being audited by CoventBridge have recently received letters closing the audit with no findings. My hunch is that CoventBridge might be learning its lesson and actually preparing to apply the Two-Midnight Rule. However, it has not withdrawn the negative findings it issued. I am going to be reaching out to the Centers for Medicare & Medicaid Services (CMS) in the hopes that my client will not need to go through the appeal process to right this wrong. 

Returning to the listener’s question, UPICs are a somewhat strange critter. They have the ability to audit organizations, but they do not actually issue the overpayment letters. They complete their audits and send the results to the MAC. I am not surprised that the MAC does not know what is happening with a UPIC audit. Until the UPIC forwards its findings, the MAC is not in the loop. While that disconnect might be frustrating, I actually think it might be a good thing. I have certainly had clients receive UPIC audits informing them a written overpayment will be forthcoming, but the client never hears a word from their MAC. My advice is the same, whether you are being audited by a MAC, a UPIC, or any other member of the alphabet soup. Be patient, sit tight, and let sleeping audits lie. I agree with the contractor that no news is good news. Until someone sends you a demand letter, I think you should accept the silence as golden. It may be hard to track, and it is definitely anxiety-producing, but it isn’t really that bad. 

Programming Note: Listen to David Glaser’s Risky Business reports every Monday on Monitor Mondays, 10 Eastern.


David M. Glaser, Esq.

David M. Glaser is a shareholder in Fredrikson & Byron's Health Law Group. David assists clinics, hospitals, and other health care entities negotiate the maze of healthcare regulations, providing advice about risk management, reimbursement, and business planning issues. He has considerable experience in healthcare regulation and litigation, including compliance, criminal and civil fraud investigations, and reimbursement disputes. David's goal is to explain the government's enforcement position, and to analyze whether this position is supported by the law or represents government overreaching. David is a member of the RACmonitor editorial board and is a popular guest on Monitor Mondays.

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