The days of surprise medical bills should soon be over.
Congress intends to pass a plan prohibiting most surprise bills as part of its end-of-year spending and Covid-19 relief package, which is expected to be voted on Monday. The inclusion of this provision in the bill brings to a close a nearly two-year debate over how to fix the practice, which sometimes leaves patients who experience a medical emergency facing bills totaling tens of thousands of dollars.
That debate has been driven in significant part by the reporting of former Vox reporter Sarah Kliff’s investigation into hospital billing. Kliff examined more than 1,000 emergency room bills as part of her yearlong investigation.
She summarized her findings like this in a December 2018 post:
In so many ways, patients find themselves in a vulnerable position during these encounters with the health care system. The result is often high — and unpredictable — bills. Hospitals are not transparent about the cost of their services, their prices vary wildly from one ER to another, and it’s hard to tell which doctors are covered by insurance (even if the hospital itself is covered). In many cases, patients can’t be certain what they owe until they receive a bill in the mail, sometimes weeks or months later.
Research has found that one in five emergency room visits leads to an out-of-network insurance bill. But even going to a hospital that’s part of your insurance network is not a total safeguard against a surprise bill: One study concluded that 16 percent of in-network admissions still result in at least one out-of-network charge because patients can still receive treatment from out-of-network doctors at an in-network facility.
After an intense lobbying battle between doctors, hospitals, and insurers, Congress has finally settled on a plan to — mostly — prevent patients from facing those surprise bills.
Everyone agreed patients shouldn’t be receiving unexpected bills, but throughout the debate, the most important point of contention was deciding how to arrive at a price for the out-of-network hospital or doctor or ambulance service. The health insurance lobby wanted to default to something close to the average in-network price that is paid for the billed services in the area, but doctors and hospitals wanted to use a third-party arbitration process to come up with a price.
The final deal is a compromise between the two. In brief:
- Surprise billing would be barred for out-of-network emergency care, for most out-of-network care at in-network facilities, and for air ambulances. The patients will be asked to pay only their in-network obligations for the care they received, and that is the end of it for them. The question then becomes what the insurer will pay the provider.
- There would initially be a 30-day period during which the insurance plan and the health care providers could try to negotiate a payment for the out-of-network claims. If they don’t reach an agreement, then arbitration would be the next step.
- The independent arbiters would primarily consider the average in-network charge for the services in question, as well as other information provided by the insurer and provider. Both sides would make an offer, and the arbiter would pick one based on the guidance stipulated in the bill.
Doctors and hospitals did score a win in the final lobbying frenzy, according to the Hill’s Peter Sullivan: The arbitrators will be prohibited from considering Medicare or Medicaid payment rates, which are usually lower than private insurance rates, in deciding the final price. That should keep the provider’s payments higher than if the government programs were part of the criteria.
Nobody would call it a perfect plan — ground ambulances are notably excluded from the prohibition on surprise billing — but most health policy experts seem to see it as a marked improvement over the status quo.
American patients still face plenty of financial challenges that people in the rest of the developed world do not: high out-of-pocket costs, unaffordable medications, and millions still left uninsured. But the particularly egregious practice of surprise billing — which could leave a mother paying nearly $1,000 for her daughter’s antibacterial ointment or a man hit by a city bus and taken to a hospital unconscious billed for $27,000 — is finally coming to an end.