The Department of Health and Human Services has 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 ER patients. The enforcement action is the largest since the law took effect in 2022.
The No Surprises Act, which took effect January 1, 2022, was designed to end the practice of surprise medical billing — the receipt of unexpected, often enormous bills from out-of-network providers at in-network facilities. Four years into its implementation, the law's enforcement machinery has finally produced its most significant action: $18.7 million in penalties against 34 hospital systems for documented violations.
The No Surprises Act prohibits out-of-network providers from billing patients more than in-network cost-sharing amounts for emergency services, regardless of the provider's network status. It also prohibits balance billing — the practice of billing patients for the difference between a provider's charge and the insurer's payment — for emergency care and for certain non-emergency care at in-network facilities.
The law requires hospitals and providers to give patients a good-faith cost estimate before scheduled services, to provide clear notice of their rights under the law, and to maintain a dispute resolution process for patients who receive bills they believe violate the law's protections. Violations are subject to civil monetary penalties of up to $10,000 per violation.
The April 30 enforcement action resulted from a coordinated investigation by HHS's Centers for Medicare & Medicaid Services and the Office of Inspector General, which reviewed billing records from 147 hospital systems between January 2023 and December 2025. The investigation identified 34 systems with documented violations across three primary categories.
The most common violation involved direct balance billing of patients for emergency services provided by out-of-network physicians — primarily emergency medicine physicians, radiologists, and anesthesiologists — at in-network hospitals. In the most egregious cases, patients received bills ranging from $4,000 to $47,000 for emergency care that should have been covered at in-network rates. HHS documented 2,847 individual balance billing violations across the 18 systems.
Twelve hospital systems failed to provide required good-faith cost estimates to patients scheduling non-emergency services, or provided estimates that materially understated actual charges. The law requires good-faith estimates to be provided at least 3 business days before a scheduled service and to include all reasonably expected charges from all providers involved in the service.
Eight systems failed to provide required notice of patient rights under the No Surprises Act, or obtained improper waivers of those rights. The law prohibits providers from asking patients to waive their No Surprises Act protections as a condition of receiving care, and several systems were found to have included such waivers in standard admission paperwork.
HHS has not publicly released the names of all 34 penalized systems, citing ongoing settlement negotiations with several facilities. However, the agency confirmed that the penalized systems include two of the 20 largest hospital systems in the United States by revenue, as well as 14 regional systems and 18 community hospital organizations.
The geographic distribution of violations spans 22 states, with the highest concentration in Texas (6 systems), Florida (5 systems), and California (4 systems) — states with large populations, high rates of out-of-network emergency physician staffing, and historically aggressive balance billing practices.
Three of the penalized systems are investor-owned, and the remainder are nonprofit. HHS noted that ownership type was not a significant predictor of violation type or severity in its analysis, suggesting that No Surprises Act compliance failures are a systemic issue rather than one concentrated in any particular ownership category.
HHS estimates that the violations identified in the enforcement action resulted in approximately $47 million in improper charges to patients — charges that patients either paid or that remain in collections. As part of the settlement agreements, all 34 systems have agreed to refund improper charges to affected patients, with interest. HHS estimates that approximately 12,400 patients will receive refunds averaging $3,800 each.
The agency has established a patient complaint portal at cms.gov/nosurprises where patients who believe they have received bills that violate the No Surprises Act can file complaints. Since the portal's launch in 2022, HHS has received more than 180,000 complaints, of which approximately 23% have been found to involve actual violations.
The American Hospital Association expressed concern about the enforcement action's scope, arguing that some of the violations identified by HHS reflect "good-faith compliance challenges" rather than intentional misconduct, and calling for clearer regulatory guidance before additional enforcement actions. The AHA has been a persistent critic of the No Surprises Act's independent dispute resolution process, which it argues systematically undervalues provider services.
Patient advocacy organizations, including the Patient Advocate Foundation and the National Patient Advocate Foundation, praised the enforcement action as "long overdue" and called for HHS to accelerate its review of the remaining 113 hospital systems in its investigation cohort.
HHS Secretary indicated at a press conference that the agency intends to complete its review of all 147 systems in the investigation cohort by the end of 2026, and that additional enforcement actions should be expected. The agency also announced that it is developing an automated billing surveillance system that will use claims data to identify potential No Surprises Act violations in real time, rather than relying on patient complaints.
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