Consumer Relief: COVID Bill to End ‘Surprise’ Medical Bills

People with private health insurance will see the nasty shock of “surprise” medical bills virtually gone, thanks to the coronavirus compromise passed by Congress.

The charges that can run from hundreds to tens of thousands of dollars come from doctors and hospitals that are outside the network of a patient’s health insurance plan. It’s estimated that about 1 in 5 emergency visits and 1 in 6 inpatient admissions will trigger a surprise bill.

Although lawmakers of both parties long agreed that the practice amounted to abusive billing, a lobbying war between doctors and insurers had thwarted a compromise, allowing the impasse to become a symbol of dysfunction in Washington.

“This has been a profoundly distressing pocketbook issue for families for years,” said Karen Pollitz, a health insurance expert with the nonpartisan Kaiser Family Foundation. “Some of these bills are onerous, and they all strike people as completely unfair.”

The compromise would take patients and their families out of the financial crosshairs by limiting what they can be billed for out-of-network services to a fee that’s based on in-network charges. The amount consumers pay would get counted toward their in-network annual deductible.

Insurers and service providers would submit their billing disputes to an independent dispute resolution process, which will follow certain guidelines. The main provisions of the legislation would take effect Jan. 1, 2022.

Although states have been moving to curb surprise billing, federal action was needed because states do not have jurisdiction over large employer plans that cover tens of millions of workers and their families.

The compromise legislation involved two years of work from dozens of lawmakers of both parties and key committees, including Energy and Commerce and Ways and Means in the House, and Health, Education, Labor and Pensions in the Senate.

Surprise bills hit patients and their families when they are most vulnerable — after a medical emergency or following a complex surgical procedure. Often patients are able to negotiate lower charges by working with their insurers and the medical provider. But the process usually takes months, adding stress and anxiety. Sometimes it doesn’t work out and the bills are sent to collection agencies.

“Our constituents have done everything right at the doctor’s office or hospital yet still found themselves stuck with surprise medical bills, sometimes to the tune of tens of thousands of dollars,” said Sens. Maggie Hassan, D-N.H., and Bill Cassidy, R-La. “And frequently, they have to fight these bills at the same time they are facing a medical crisis.”

According to the Kaiser Foundation, 18% of emergency visits lead to at least one out-of-network charge for people covered by large employers, as do 16% of in-network inpatient admissions. New York and Texas have among the highest rates.

The problem is a direct of result of high health-care costs. To try to keep premiums in check, insurers set up networks of hospitals and doctors who agree in advance on payment levels. But some high-demand clinicians, such as emergency room doctors and anesthesiologists, have an incentive to stay out of at least some networks, trying to maximize their earning power. That dynamic has grown more complicated as profit-seeking investors buy out medical practices that have greater billing leverage.

Insurers were cool to the compromise, saying the structure of the dispute resolution process could lead to higher payouts that then feed premium increases.

Public programs like Medicare and Medicaid prohibit or restrict such billing practices.