Good news for bad outcomes of surprise billing
February 1, 2021 | View PDF
Some significant changes affecting seniors on health care issues may have gotten lost in the tumultuous whirlwind changes between the end of the Trump administration and the start of the Biden administration. Amid the increasing intensity of the pandemic, the violent turbulence at the U.S. Capitol, and the slower than expected rollout of the first vaccines, Congress actually got some important things done affecting seniors that went unnoticed, buried in the massive spending package.
Congress passed a $900 billion pandemic relief package and lawmakers tacked on a $1.4 trillion catchall spending bill to keep the government running, including thousands of pages of other end-of-session business as lawmakers closed out the 116th Congress. The relief package sped through the House and Senate in a matter of hours, with Senators voting 92-6 after the House approved the package 359-53.
These bills avoided a federal government shutdown, and combined relief and annual funding bills – and provided another round of stimulus checks, this time, $600 per adult who are in certain income thresholds, and the same amount for children.
But also included in that package was a bipartisan agreement on surprise medical billing, after nearly two years of disagreement.
Ending surprise billing
After nearly two years of sharp divisions over the details, lawmakers approved an agreement to ban surprise medical bills, that come when patients unwittingly receive care from an out-of-network health provider – from doctors to ambulance companies – and often for tens of thousands of dollars. News reports have documented the outrageous bills among thousands of others: a mother paying nearly $1,000 for her daughter’s antibacterial ointment, or the man hit by a city bus, taken to a hospital unconscious and then surprise-billed for $27,000.
Hospitals and doctors will now be required to work with health insurers to settle the bills, not force the charges on patients. These unexpected medical bills have been something Americans have been worried about for the past few years.
The surprise about surprise medical bills was that the measure was resolved and included in the overall legislation. That’s because there’s been a high-stakes battle between all the vested parties – hospitals, insurers, physicians, patient advocacy groups, ambulance companies, air ambulance companies and the many private equity firms which own a growing number of doctor’s practices.
This almost got fixed way back in 2000, but those groups were unable to resolve their differences. So, the battle continued. And this time, no one got everything it wanted. The main compromise was over how to determine how much providers will ultimately be paid for their services.
The law ends the practice of balance billing – when out-of-network medical providers bill patients for amounts their insurers did not cover, starting in 2022 when the law goes into effect.
It will affect emergency care, as well as when people are transported by air ambulance or when they get non-emergency care at an in-network hospital but are unknowingly treated by an out-of-network physician or laboratory.
Under the agreement, patients will now pay only the deductibles and copayment amounts they would under the in-network terms of their insurance plans. Doctors and medical providers will no longer be able to hold the patient hostage for the difference between those amounts and the higher fees they might like to charge. Now, the differences will have to be worked out with the insurance companies. For those without insurance, where everything is out of network – the law requires the Health and Human Services Department to create a provider-patient bill dispute resolution process.
Surprise billing has been especially difficult for people who go to emergency rooms, and in crisis have little choice about whether they are in-network. The recent growth of emergency rooms being staffed by private equity-owned agencies that sign few in-network agreements, has increased the number of disputes. But the agreement also covers non-emergency care provided at in-network facilities where patients receive care and services from out-of-network providers, such as anesthesiologists, radiologists, pathologists and lab work.
Lawmakers also added in a prohibition on balance billing for air ambulance transportation, which is among the most expensive medical services, often costing tens of thousands of dollars, and is vital to those in rural areas. But the bill did not extend that protection to the far more commonly used ground ambulance services. It did call for the creation of a committee to recommend how to take this step. But for now, consumers are not protected from ambulance costs, often thousands of dollars.
Under the agreement, doctors can still balance-bill their patients, but they must get consent in advance. This is particularly important when a patient wants to see an out-of-network physician, like a surgeon or a doctor who you want a second opinion from. In those cases, physicians must provide a cost estimate and get patient consent in advance of the outside doctor’s appointment – but it only applies to non-emergency circumstances.
Negotiating billed charges
The real fight came down to how to decide what amounts providers would be paid by insurers. Insurance companies wanted to default to something close to the average in-network price that is paid for the billed services in the area, but doctors and hospitals wanted to use a third-party arbitration process to come up with a price.
Also at issue were that doctors and hospitals did not want any kind of standard for all bills, while insurers, employers and consumers wanted just such a standard. That led lawmakers to find middle ground. It will give insurers and providers 30 days to negotiate payment for out-of-network bills. If that fails, the claims go to an arbitrator who would have the final say. It does not specify a benchmark specifically, but it bars hospitals and doctors from using their “billed charges” during arbitration.
Those “billed charges” are often much higher and unrelated to the actual cost of providing the care. While that’s a win for consumers, doctors and hospitals also won something – government payments generally use Medicare or Medicaid prices which are much lower. Under the agreement, Medicare and Medicaid prices will not be considered. Instead, negotiators will look at the median in-network prices paid by each insurer for the services in dispute. Other factors can also be considered, including how sick the patient was compared with others.
What remains unclear is what this may mean to the more than 30 states that have enacted
their own surprise billing protections. Some states have different ways to determine a payment, so things will still have to be worked out at the state level.
But let’s be clear: while Americans still face plenty of financial health care challenges that many in the rest of the world do not, such as high out of pocket costs, unaffordable medicines while millions still remain uninsured, at least surprise billing is coming to an end.
Also contributing to this report were NPR, Kaiser Health News, the LA Times and VOX.