Surprise Billing Gets a Surprise

Just in time for Christmas

Hidden in the coronavirus relief and government funding bill is legislation that attempts to put a stop to “surprise” medical bills.

♦ President Trump signed the legislation late on December 27^th.

Starting in 2022, consumers won't get balance bills when they receive care at an in-network hospital but are unknowingly treated by an out-of-network physician or laboratory.

While the health care industry agreed that patients should be held harmless in emergency situations, hospital and physician groups and insurers fought vigorously over who would pick up the tab.

The legislation itself was a bit of a surprise, coming after two years of debate that featured high-stakes lobbying by all who stood to gain or lose: hospitals, insurers, patient advocacy groups, physicians, air ambulance companies and private equity firms, which own a growing number of doctor practices.

♦ The deal that congressional committees came up with is largely a win for hospitals and doctors.

Medical providers won't be allowed to balance bill patients for just any fees they might like to charge. Instead, providers will have to work out acceptable payments with insurers.

• Patients will still need to pay their plan’s deductibles and copayment amounts that they would normally pay under the in-network terms of their insurance plans. But patients will be free from any price negotiations.

For the uninsured, the legislation requires the secretary of the Department of Health and Human Services to create a provider-patient bill dispute resolution process.

Details to watch out for

The legislation applies to emergency and certain non-emergency care provided at in-network facilities, where patients receive care and services from out-of-network providers, such as anesthesiologists and laboratories.

Members will only be responsible for in-network cost-sharing amounts where members do not have the ability to choose an in-network provider.

♦ Be careful, providers can try to get you to sign a notice giving your consent to be balance billed. Most people sign everything handed to them without fully reading all the documents.

Also included, is prevention of balance billing for air ambulance transportation, which often costs tens of thousands of dollars.

• The bill does NOT provide protection from ground ambulance services. This is a serious problem that our elected leaders were afraid to take on. The bill just calls for an advisory committee to come up with a recommendation for dealing with this. Good luck.

♦ In some cases, physicians can still balance-bill their patients. To do this, they must get your consent in advance. You will be asked to sign that you agree and then the physician can bill you pretty much whatever he or she wants.

This legislation won’t stop your doctor’s office from continuing to make you sign a broad statement to obligate you to pay for unknown services your insurance may not cover. This is a different problem.

If you wish to receive out-of-network treatment, physicians must provide a cost estimate and get your consent at least 72 hours before treatment. A few last-minute situations will allow physicians to hand patients the consent information the day of the appointment.

♦ This part of the bill was aimed at patients who want to see an out-of-network physician, perhaps a surgeon or specialist recommended by a friend.

Unfortunately, this part of the bill creates the potential for great financial risk because now physicians can bill almost anything. A “cost-estimate” is just that, an estimate not a guarantee.

♦ There is a little protection - the legislation allows this “consent” practice only in nonemergency circumstances and prevents many types of physicians from doing this.

Anesthesiologists, for example, cannot seek consent to balance bill for their services, nor can radiologists, pathologists, neonatologists, assistant surgeons and laboratories.

Payment negotiations

The fight over this type of legislation has always been over how to decide what amount should be paid.

Hospitals and physicians opposed any kind of benchmark or standard to which all bills would be held. They vigorously opposed setting prices in-line with Medicare’s price list. Most Republicans also oppose anything that remotely smells of government price controls.

On the other side, insurers, employers and consumer groups argued for a benchmark, warning that providers would work the system for much higher payments.

• A compromise was settled on.

It gives insurers and providers 30 days to try to negotiate payment of out-of-network bills. After that, the dispute goes to an arbitrator.

The arbitrator is NOT allowed to consider costs paid by Medicare. That was a last-minute win for hospitals and physicians. But the biggest winners are private equity firms which own physician staffing companies.

♦ Private equity firms have used massive amounts of debt to buy up doctors' practices. They then charge exorbitant fees for the doctors' services in order to try to pay down this debt and reward investors.

The arbitrator will not have a benchmark to work from, but physicians and hospitals will not be able to submit their “billed charges" to the arbitrator. Everyone has always known those charges are just made-up charges and bear little or no relation to the actual cost of providing the care. This was considered a win for insurers.

The arbitrator can consider the median in-network prices paid by each insurer for the services in dispute. Also, how sick the patient was compared with others may be considered.

Overall, the legislation includes some wins for provider groups and some wins for insurers.

Patients may still be surprised by the high cost of health care overall. But they will now be protected against most unexpected bills from out-of-network providers.

State laws

More than 30 states have enacted some type of surprise billing protections, but only 17 are considered comprehensive in that they cover nonemergency situations at in-network hospitals.

State laws do not apply to all types of insurance. They often do not cover people who get their health insurance through self-insured employers, which tend to be midsize to large companies because they fall under federal rules.

This new legislation will apply to most types of insurance plans, including those offered by self-insured employers.

In some cases, state law may take priority over federal law. For example, states may have already put in place comprehensive methods for things like determining a payment.

♦ It is likely that state lawmakers will alter their legislation to more closely align with the federal legislation to avoid confusion. If they don't, there could be rules that affect people differently depending on how they received their health insurance.

It is also very probable that any player who looks to make more money based off the interpretation of the federal legislation will sue to have the federal law override the state law.

• Remember this federal legislation does not take effect until January 2022. Until that time we have to rely on our state laws. Some are pretty good but most are a bit watered down.