For more than a decade, Americans who went to in-network emergency departments received bills from out-of-network physicians they never chose and never met — bills that could reach tens of thousands of dollars. This is the story of how that practice ended, who fought to preserve it, and what the No Surprises Act has actually accomplished since taking effect in 2022.
On December 27, 2020, President Trump signed the Consolidated Appropriations Act of 2021, a 5,593-page omnibus spending bill that contained, buried within its pages, the No Surprises Act — the most significant patient protection legislation in a generation. The law banned surprise medical billing for emergency care effective January 1, 2022. It was the culmination of a decade of advocacy, a lobbying war that cost the healthcare industry hundreds of millions of dollars, and a political fight that united conservatives and liberals in a way that almost nothing else in American healthcare policy had managed to do.
Surprise billing — also called balance billing — occurred when a patient received care at an in-network facility from an out-of-network provider. In emergency medicine, this happened routinely and unavoidably: a patient would go to an in-network emergency department, receive care from an emergency physician who was employed by a staffing company that was not in the patient's insurance network, and then receive a bill for the difference between the physician's charge and the insurer's payment.
The patient had no meaningful ability to avoid this situation. In an emergency, patients cannot shop for in-network physicians. They cannot ask the emergency physician treating their heart attack whether she is in-network. They cannot consent to out-of-network care in any meaningful sense. Yet the legal and contractual framework of American health insurance allowed — and in some cases incentivized — providers to bill patients for amounts that could reach tens of thousands of dollars.
The scale of the problem was enormous. A 2019 study published in JAMA found that 22% of emergency department visits resulted in at least one out-of-network charge. A 2020 analysis by the Kaiser Family Foundation found that the median surprise bill for an emergency department visit was $628, but that bills in the 95th percentile exceeded $3,000 — and that some patients received bills of $50,000 or more. Medical debt from surprise billing was a leading cause of personal bankruptcy in the United States.
The surprise billing problem was not evenly distributed across the healthcare system. It was concentrated in specialties where private equity-backed staffing companies had achieved dominant market positions: emergency medicine, anesthesiology, and radiology. These companies — Envision Healthcare, TeamHealth, and others — had a business model that depended in part on out-of-network billing. By remaining out of network with insurers, they could bill patients and insurers at rates far above what in-network contracts would have allowed.
The strategy was sometimes called "surprise billing arbitrage." A PE-backed staffing company would acquire the physician contracts at a hospital, decline to negotiate in-network contracts with insurers, and then bill patients and insurers at full charges. When insurers paid less than the full charge, the company would bill the patient for the balance. The patient, who had no role in the staffing company's decision to remain out of network, was left holding a bill they had no way to anticipate or avoid.
The lobbying effort to preserve this business model was extraordinary. Envision Healthcare, TeamHealth, and their private equity backers spent more than $100 million on lobbying and advertising campaigns between 2018 and 2020 to defeat or weaken surprise billing legislation. The campaigns included television advertisements featuring physicians warning that surprise billing legislation would harm patient care — advertisements that were funded by the same PE-backed companies that were profiting from the practice.
Congress had been attempting to pass surprise billing legislation since at least 2018, when the Senate Health, Education, Labor, and Pensions Committee began holding hearings on the issue. The core policy question was not whether to ban surprise billing — there was broad bipartisan consensus that it should be banned — but how to resolve payment disputes between insurers and out-of-network providers.
Insurers favored a benchmark payment approach, in which out-of-network providers would be paid at a rate tied to the median in-network rate in a given market. Providers — particularly PE-backed staffing companies — favored an independent dispute resolution (IDR) process, in which a neutral arbitrator would determine the appropriate payment. The difference was enormous: benchmark payment would have significantly reduced out-of-network payments to PE-backed staffing companies, while IDR would have preserved much of their leverage.
The lobbying battle over this distinction was one of the most expensive in recent healthcare history. The PE-backed staffing companies and their allies spent tens of millions of dollars on campaigns targeting specific members of Congress, funding think tanks and advocacy organizations that opposed benchmark payment, and running advertising campaigns in swing districts. The effort succeeded in blocking legislation in 2018 and 2019.
The No Surprises Act, as ultimately enacted, represented a compromise. It banned balance billing for emergency care and established an IDR process for payment disputes between insurers and providers — a partial victory for the provider lobby. But it also established a presumption that the qualifying payment amount (essentially the median in-network rate) was the appropriate starting point for IDR determinations — a provision that the provider lobby fought unsuccessfully to remove.
The No Surprises Act took effect January 1, 2022. Its implementation was immediately contested. Provider groups — including the American College of Emergency Physicians, which had supported the law's passage — challenged the implementing regulations in federal court, arguing that the IDR process as implemented by HHS gave too much weight to the qualifying payment amount and effectively functioned as a benchmark payment system.
The litigation was partially successful: federal courts struck down portions of the implementing regulations in 2022 and 2023, requiring HHS to revise the IDR process. The revised regulations, finalized in 2024, maintained the qualifying payment amount as a starting point but gave arbitrators more explicit authority to consider other factors, including the provider's training, experience, and market share.
By 2024, the IDR process had resolved more than 1.2 million payment disputes. The average payment in resolved disputes was approximately 22% below the provider's initial billed charge — a significant reduction, but one that still exceeded the qualifying payment amount in many cases. The process was also significantly backlogged: the volume of disputes far exceeded the capacity of the IDR system, leading to delays of months or years in dispute resolution.
In April 2026, HHS issued $18.7 million in civil monetary penalties to 34 hospital systems for violations of the No Surprises Act, including failure to provide good-faith cost estimates and improper balance billing of emergency patients. The enforcement action was the largest since the law took effect and signaled a more aggressive enforcement posture from the Biden-era HHS that has continued under the current administration.
The No Surprises Act has substantially reduced the incidence of surprise billing for emergency care. A 2024 analysis by the Peterson-KFF Health System Tracker found that the proportion of emergency department visits resulting in out-of-network charges had fallen from 22% in 2019 to approximately 4% in 2023 — a dramatic reduction, though not complete elimination of the problem.
The financial impact on patients has been significant. The same analysis estimated that the law had prevented approximately $5.8 billion in surprise bills annually — money that would otherwise have been extracted from patients who had no ability to avoid the charges. For individual patients, the protection has been most meaningful for those who faced the largest bills: the law's protections are most valuable for the patients who were most financially vulnerable.
The law's impact on the PE-backed staffing industry has also been significant. The loss of out-of-network billing revenue was one of the factors that contributed to Envision Healthcare's financial distress and its second bankruptcy in 2026. The combination of the No Surprises Act, the COVID-19 pandemic, and the travel nurse rate spike created a financial environment that the PE-backed staffing model could not survive.
22%
ER visits with out-of-network charges (2019)
4%
ER visits with out-of-network charges (2023)
$5.8B
Annual patient savings from the law
$100M+
Industry lobbying to defeat the law (2018–2020)
1.2M
IDR disputes resolved through 2024
$18.7M
HHS penalties issued April 2026