US ditches surprise medical bills
In a rare show of bipartisan unity, America’s 116th Congress ended its fractious tenure by sending President Trump the long-awaited ‘No Surprises Act’ – legislation crafted to protect patients and their families from unexpected medical bills for services they thought were covered by their insurance
The President signed the Act, which was part of a larger year-end spending law, on 27 December 2020, almost two years after it was introduced.
The Act protects patients from ‘surprise’ medical bills (also known as balance bills) when they have little or no control over who provides the services. This includes emergency services provided by out-of-network providers; non-emergency services provided by out-of-network providers (except for prior full disclosure); and emergency air ambulance services.
Legislators, employers, and health plan insurers have increasingly been pressured by patients complaining that they had been billed, often thousands of dollars, for emergency or even non-emergency services performed by out-of-network doctors within their network hospitals, usually by pathologists, anesthesiologists, radiologists or other clinicians working under contract to outside staffing companies. As independent contractors, these doctors are not bound by the terms of patients’ insurance contracts.
In America’s internecine world of medical pricing, the difference between in and out-of-network can really hurt.
In one seminal case reported in ITIJ in 2019, a New York patient was billed US$117,000 by an out-of- network surgeon who assisted in his herniated disc operation. The patient had never seen nor spoken with the assistant, nor was he aware he would be involved in the surgery. The insurance covered the fees of his in-network primary surgeon ($6,000), and finally, as an act of goodwill, it settled with the ‘assistant’ to avoid court action. This is a far from isolated case. The US Federal Trade Commission has reported that one-fifth of emergency room admissions trigger surprise bills.
What does the No Surprises Act do to get the patient out of the middle?
The No Surprises Act—which goes into effect on 1 January 2022—is designed to get the patient out of the middle in disputes between their health plans, doctors and other providers and third-party collectors.
For international travel insurers, whose clients may need air ambulance lifting from their beach resort in Anguilla to a medical centre in Miami, the act may be a major rescue mission in itself, as it applies not only to hospital staff (in or out-of-network) but to air ambulance companies. They, too, will be limited in their billing practices although many are now working toward in-plan agreements with insurers. Ground ambulances are exempt from the Act as many of them a regulated by local communities.
According to the Government Accountability Office (Congress’ watchdog), about 69 per cent of air ambulance transports were out-of-network in 2017, when the median price charged for helicopter transport was $36,400, and $40,600 for fixed wing aircraft. Medicare pays but a fraction, when it applies, and employer-sponsored plans are not designed to cover hefty balance bills.
The act explains that insured patients will still be responsible for deductibles and out-of-pocket copayments for services as defined in their contacts, but they won’t be responsible for cost-sharing services beyond what they would have paid for in-network services. It also specifically outlaws ‘surprises’ from specialists most involved in emergency treatment, where the patient is not in a position to control his or her immediate care: i.e., anesthesiologists, radiologists, neonatologists, pathologists, assisting surgeons. The most they can charge is the patient’s in-network rate.
If, however, consumers wish to be treated for a non-emergency by an out-of-network physician on a balance bill basis, they must be given a good-faith cost estimate from the specialist within 72 hours before treatment.
The big stickler—getting paid
Essentially, health plan insurers, employers and consumer advocates sought the use of fee benchmarks to govern balance billing disputes (using community median in-network rates, or even Medicare rates in calculating their standard). They argued that without benchmarks, doctors would maneuver for higher fees.
Doctors, including hospitals, opposed any benchmarks and favored arbitration to settle disputes. They argued, successfully, that Medicare and Medicaid fees were off limits in developing benchmarks. They won on that point and they also won on the arbitration issue.
In effect, where bills are disputed, the opposing parties will have 30 days to negotiate settlements. If unsuccessful, they will move to an independent resolutions process known as ‘Baseball Arbitration’,
in which each party proposes an amount, and the arbitrator (weighing all the variables) picks one or the other and makes a binding decision – no splitting the difference. It’s what Major League Baseball uses in resolving high flying salary disputes for its millionaire players and it has become a staple in America’s business community.
Some states had already acted
Well before the federal No Surprises Act was signed into law, more than 30 states had enacted variations of surprise bills on their own, some of them equally tough. But state bills could cover only insurance plans that are state regulated, not the large-employer sponsored self-insured plans that cover 135 million Americans and that are federally regulated. The federal Act will not displace state laws already on the books, but it’s expected to influence any future alterations made at state levels.