By Julie Appleby, Kaiser Health News
That story ran on NPR too. It can be republished for free.
Most Americans tell survey respondents that they are worried about being able to afford an unexpected medical bill.
Late Monday, Congress passed legislation to allay some of those fears. The measure is contained in a nearly 5,600-page package that offers economic relief for coronavirus and government funds for the remainder of the fiscal year.
The legislation specifically addresses the charges stemming from a longstanding practice of off-network medical providers – from doctors to ambulance companies – sending insured Americans “surprise bills”, sometimes for tens of thousands of dollars.
The legislation itself came as a bit of a surprise after being debated for two years in which everyone involved was lobbying: hospitals, insurers, patient advocacy groups, doctors, air ambulance companies and private equity firms own a growing number of medical practices. A similar effort failed at the last minute a year ago after heavy pressure from a number of interests, including these private equity groups.
This time no group got everything they wanted. Legislators have made compromises – mainly on how to determine how much providers will ultimately be paid for their services.
“No law is perfect,” said Zack Cooper, an associate professor of public health and economics at Yale who studies healthcare pricing. “But it fundamentally protects patients from being billed,” he said, referring to a network outside the network of medical providers who charge patients for amounts their insurer didn’t cover. “That is a remarkable achievement.”
Bottom line: Patients may still be surprised by the high cost of overall health care. However, you are now protected from unexpected bills from providers outside the network.
Here is an overview of what this legislation means for consumers:
Less surprise bills
Starting in 2022, when the law comes into effect, consumers will no longer receive residual bills for receiving emergency care, when transported by air ambulance, or when they are not treated urgently in an on-grid hospital but are unwittingly treated by a doctor or laboratory outside the network.
Patients only pay the deductibles and co-payment amounts they would pay based on the on-line terms of their insurance plans.
Medical providers must not hold patients responsible for the difference between these amounts and the higher fees they may choose to charge. Instead, these providers must work out acceptable payments with insurers. For the uninsured, for whom everything is outside of the network, the health and social services secretary must establish a process to resolve disputes between providers and patients.
The measure is aimed at situations where patients have little choice over whether to be on the network, including emergencies. A recent survey found that an average of 18% of emergency rooms had at least one surprise invoice. (A growing number of emergency rooms are staffed with private equity agencies who sign few network agreements.)
The legal agreement also applies to non-emergency care in on-network facilities where patients are cared for by providers outside the network such as anesthetists and laboratories.
Also included in the billing bar is ambulance transportation, which is one of the most expensive medical services and often costs tens of thousands of dollars.
However, the bill does not extend consumer protection to the much more frequently used ground ambulance services. However, an advisory committee is needed to recommend how to do this step.
An option for consumers to consent to billing
In some cases, doctors can compensate their patients, but they need to get their consent in advance.
This part of the bill is for patients who want to see a doctor outside the network, possibly a friend-recommended surgeon or obstetrician.
In these cases, doctors must provide an estimate and obtain patient consent at least 72 hours before treatment. For situations with a shorter turnaround time, the invoice requires that the patient receive the consent information on the day of the appointment.
In a sense, however, this provision allows consumers to lose protection.
Health care providers “must provide you with a good faith estimate. If you sign it, you can be billed for anything the doctor may ask you to bill,” said Jack Hoadley, research professor emeritus at Georgetown University’s Health Policy Institute.
Legislation allows this only in non-urgent circumstances and excludes many types of doctors from the practice. Anesthesiologists, for example, cannot obtain consent to bill their services, nor can radiologists, pathologists, neonatologists, assistant surgeons or laboratories.
The payment is sorted out in negotiations
While lawmakers agreed to keep patients harmless, the real battle was over deciding what amounts insurers would pay providers.
Some groups – including hospitals and doctors – opposed any kind of benchmark or standard by which all bills would be kept. On the other hand, insurers, employers and consumer groups advocated a benchmark, warning that without a benchmark, providers would expect much higher payments.
Legislation creates a middle ground.
Insurers and providers have 30 days to try to negotiate payment of bills outside the network. If that fails, the claims would go through an independent dispute settlement process with an arbitrator who would have the final say.
The bill does not include a benchmark, but does prevent doctors and hospitals from using their “billed fees” during arbitration. These fees are generally much higher than the negotiated rates and have little or no relation to the actual cost of providing care.
This was seen as a win for insurers, employers, and consumer advocates, who argued that allowing fees to be billed would mean higher prices – which would potentially increase premiums – in cases sent to arbitration.
The fees charged are “fully made up” by the providers, said Cooper at Yale. “So the big thing is that the umpires don’t consider fees.”
But hospitals and doctors have also reached a limit that they were looking for.
In the event of last-minute changes over the weekend, they managed to exclude Medicare or Medicaid prices from being considered during the arbitration. These government payments are often far lower than the rates negotiated by insurers and self-insured employers.
Instead, the bill states that negotiators can take into account the mean network prices each insurer paid for the services at issue. Other factors may also come into play, including whether the medical provider tried to join the network of insurers and how sick the patient was compared to others. It also allows for network tariffs that a provider may have agreed to over the past four years, which can help keep some high-priced services such as: B. Ambulance, remain costly even in arbitration.
Overall, the legislation contained “some successes for provider groups,” said Loren Adler, USC-Brookings Schaeffer’s deputy director of health policy.
Nonetheless, he believes that the legislation will help insurers contain some prices and “put some downward pressure on premiums, even if it is ultimately relatively small”.
State laws can change
More than 30 states have put in place some form of protection against surprise settlements, but only 17 are considered comprehensive, according to the Commonwealth Fund.
Extensive states – such as California, New York and New Mexico – extend protection to non-urgent situations in network-internal hospitals. However, this is not the case in less extensive states, according to the fund.
And state laws have one more caveat: they only apply to certain types of insurance, and often don’t cover Americans who get their health insurance through self-insured employers, which are more medium-sized for large companies because they’re covered by federal regulations.
However, the new federal regulations apply to most types of insurance plans, including those offered by self-insured employers.
“States cannot fully handle these situations, but that covers them,” Hoadley said in Georgetown.
However, some provisions of state law, such as the determination of a payment, differ from federal law. In such cases, federal law shifts to states.
Statehouse lawmakers could potentially change their legislation or adopt new proposals to avoid confusion, policy experts said. Failure to do so could result in rules being placed on them that affect people differently depending on whether their insurance is taken out through a large self-insured employer or directly from a government insurance plan. “I’d be surprised if states didn’t just comply with federal law over time,” Adler said.
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Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation that is not affiliated with Kaiser Permanente.