HMN 2025: How No Surprises Act reduces patients’ out-of-pocket spending for medical care

Investigators at Mass General Brigham and the Richard A. and Susan F. Smith Center for Outcomes Research at Beth Israel Deaconess Medical Center have uncovered how patients’ health care spending has changed following the implementation of the No Surprises Act in 2022, a bipartisan law prohibiting unexpected or “surprise” bills after patients receive out-of-network medical care.

The team found that the law dramatically reduced out-of-pocket costs, with an average annual savings of nearly $600 per patient. The findings are published in The BMJ.

“One in five insured adults in the U.S. incurred surprise bills before the No Surprises Act, and these bills frequently exceeded thousands of dollars, resulting in substantial financial hardship among patients,” said lead author Michael Liu, MD, MPhil, a clinical fellow in the Department of Medicine at Brigham and Women’s Hospital, a founding member of the Mass General Brigham health care system and research fellow at the Smith Center.

“Government agencies have called for rigorous evaluations of the law, and we believe our paper is the first to do so.”

Liu and his colleagues analyzed data on 17,351 adults aged 19–64 years with direct-purchase private insurance. Some resided in intervention states that gained protections from the No Surprises Act and others resided in control states that already had laws providing comprehensive surprise billing protections and therefore did not gain additional protections from the law.

After implementation of the No Surprises Act, out-of-pocket medical spending declined significantly in intervention states—nearly $600 annually per patient—but not in control states, indicating that the law was successful in protecting patients from surprise medical bills.

Although experts initially projected that premium spending (fixed monthly payments to insurance companies) would decline because the law was supposed to promote fair payment negotiations between insurers and providers, the researchers observed that such spending was unchanged after the law.

“This finding is in line with anecdotal reports that providers—especially those backed by private equity firms—are leveraging loopholes and unfair tactics to secure higher payments at the expense of patients and the health care system,” said Liu.

Importantly, the No Surprises Act did not meaningfully reduce high-burden medical spending, defined as a family spending more than 10% of their income on health care, suggesting that opportunities remain to build upon the law and pursue additional policy strategies to reduce health-care-related financial strain, particularly among socioeconomically disadvantaged populations.

“Our findings have important implications for patients and should inform ongoing policy efforts to prevent financial toxicity and address the health care affordability crisis in the U.S.,” said senior author Rishi Wadhera, MD, MPP, MPhil, Associate Director of the Richard A. and Susan F. Smith Center for Outcomes Research.