New law fights medical sticker shock

The Biden administration is implementing a Trump-era measure designed to protect consumers from unexpected medical bills. The bipartisan legislation, signed last year by President Donald Trump, seeks to guard patients against surprise charges that can range from a few hundred to tens of thousands of dollars.

Surprise bills often result when a healthcare facility like an emergency room belongs to a patient’s health insurance network, but the physician providing the care does not. In those cases, insurance may cover most of the cost of the nursing care, supplies, and other services provided by the hospital but not the doctor’s diagnosis and treatment.

One 2014 survey by Yale University researchers showed that 22 percent of all emergency room visits resulted in an out-of-network medical bill. Surprise medical bills examined by the researchers ranged from $900 to more than $19,000.

Doug Moore, a 34-year old Baton Rouge resident, was at a conference in Florida when acute stomach pain sent him to the emergency room. He checked with his insurance company before he went, just to be sure the ER was in-network. It was. A doctor treated him and sent him on his way. But back home, he opened a bill from the doctor for $1,620.

“That really makes me mad, and kind of breaks my heart,” Moore said.

Surprise bills like that one have plagued consumers for years. And, after the bill gets to the patient, there is often little they can do about it.

“People are, by and large, not aware that they’re playing that type of financial roulette,” Chuck Bell, programs director at Consumers Union, told The New York Times. “They follow the rules, and they go to the in-network hospital, and then it’s just like a bait-and-switch.”

The legislation, known as the No Surprises Act, was part of an omnibus bill that included COVID-19 stimulus relief and federal funding for fiscal year 2021. The act says that if patients seek emergency care at a facility where any services are covered by their insurance, they must be billed as though all of the services were covered, even if some were out-of-network. For nonemergency care, providers have to notify patients upfront in writing that some of the services they receive will be out-of-network and how much they will cost.

To determine how much insurers will pay in those cases, an arbitrator will work with hospitals and providers to find a median in-network price that is higher than Medicare or Medicaid pays but lower than the billed charges of providers.

Thirty-three states already have laws addressing surprise medical bills, according to the Commonwealth Fund. Only 18 of those states have comprehensive protections.

Over the next few months, consumer advocates, insurers, and medical and hospital associations will be reading closely over the lengthy bill to decide how to follow its requirements, but it could take through next year to fully implement it, said Karen Pollitz, a health insurance expert with the nonpartisan Kaiser Family Foundation.

“Even if 90 percent of [surprise bills] are handled perfectly the first year, you could still have hundreds of thousands that go through to the patient,” Pollitz said.

The Biden administration released a series of regulations last week to enforce the law. It will allow public comment for 60 days, with the rules scheduled to take effect on Jan. 1, 2022.