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Spring 2021  Volume 14, Number 1        

woman looking at hospital bill

Congress Takes the Surprise Out of Surprise Billings

Congress is putting an end to surprise billing by hospitals.

Consumers can look forward to January 2022 as an end to unexpected — or “surprise” — medical bills. Congress passed a bill in December to stop this practice.

Surprise medical bills, also referred to as balance billing, occur when patients are billed for care received from out-of-network providers where insurance covers none or only a small portion of the costs. This sometimes happens accidently. Patients often choose in-network hospitals, only to later discover that a provider working at the hospital is not in-network.

The legislation comes after two years of debate and negotiation between members of Congress, hospitals, insurers, patient advocacy groups, physicians and air ambulance companies. The bill also includes a package providing coronavirus economic relief and government funding for the rest of the fiscal period.

Here are some highlights of the bill:

Fewer Surprise Bills

Consumers no longer will be billed for out-of-network costs when they:

  • Seek emergency care — Patients who come to an out-of-network facility for a medical emergency will be covered for all care they receive until discharged or stabilized enough to be transferred to an in-network benefit level facility.
  • Are transported by an air ambulance.
  • Receive non-emergency care at an in-network hospital where they are unknowingly treated by an out-of-network physician or laboratory. Most hospital-based specialists, such as anesthesiologists, neonatologists, radiologists and surgeon's assistants, fall into this category.

Patients will still be required to pay the in-network deductibles and copayments. Plus, they will need to pay the costs of any out-of-network providers they choose to see. The legislation also doesn't cover ground ambulance services.

The Department of Health and Human Services will create a provider-patient bill dispute resolution process for those who are uninsured and for whom everything is out of network.

When Balance Billing is Allowed

Physicians can balance-bill their patients if they get the patient's consent in advance and it is a non-emergency situation. For instance, a patient might want to see an out-of-network physician, perhaps a surgeon or obstetrician, who has been recommended by a friend. However, certain types of physicians are barred from this practice, including anesthesiologists, radiologists, pathologists, neonatologists, assistant surgeons or laboratories.

To get permission to balance bill, the physician must provide a cost estimate and get patient consent at least 72 hours before treatment. If it’s not possible to give 72 hours notice, patients must receive the consent information the day the appointment is made.

Negotiated Payments

Once the decision was made that patients won't have to pay, lawmakers agreed that providers and insurers will have to decide who will cover the higher fees.

Insurers and providers now have 30 days to negotiate payment of out-of-network bills. If the insurer and health care provider cannot reach a resolution, they must work with an independent arbitrator. The Department of Health and Human Services will set up the arbitration system.

Physicians and hospitals will be barred from using their “billed charges” during arbitration because these charges usually are much higher than negotiated rates and may bear little relation to the actual cost of providing the care.

In addition, arbitrators will not be allowed to consider Medicare or Medicaid prices during arbitration, because those payments often are far lower than the negotiated rates paid by insurers and self-insured employers. Instead, the arbitrators will be allowed to consider the median in-network prices paid by each insurer and factor in the extent to which circumstances necessitated receiving care from an out-of-network services provider.

Policy analysts believe this new law will ultimately result in prices falling back to within in-network norms.

The "No Surprises Act" won't go into effect until January 2022, giving the Secretary for Health and Human Services time to craft enforcement rules and for providers and insurance companies to implement data and paperwork changes.

State Laws May Change

Thirty-two states already enacted some type of surprise billing protections. Of those, the Commonwealth Fund rates only 17 as comprehensive and many apply only to certain types of insurance.

The new federal rules will cover most types of insurance plans, including those offered by self-insured employers. In addition, some provisions in state law, such as how to determine a payment, differ from the federal law. In these cases, the federal law defers to states.

Observers expect that state lawmakers may eventually alter their legislation or adopt new proposals to avoid confusion.


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In this issue:

This Just In...

Congress Takes the Surprise Out of Surprise Billings

Pros and Cons of Having Two Health Insurance Policies

The Increased Importance of Life Insurance During the Pandemic

Social Security Adjustments for 2021


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