Committees within the House and the US Senate agree that surprise medical bills are bad news for patients and are close to passing legislation that will get rid of them.
While surprise bills can be a result of unplanned care, meaning the patient may not be in a situation to choose the doctor or site of care or ambulance provider, it can also result from planned care if some of the service providers at an in-network hospital are deemed out-of-network (OON) by the patient’s insurance company. There are usually 2 components to surprise medical bills:
- Differences in cost-sharing levels between in-network and OON services
- Balance billing, which is used by OON providers to cover the costs that are not paid by the insurance company. In this situation, the physician or other health service provider may directly bill the patient.
A recent report released by the Peterson Center on Healthcare and the Kaiser Family Foundation found that hospital stays and emergency visits increase the risk for individuals covered under large employer plans of receiving these surprise bills, especially if they are in a self-insured plan which is not protected by state surprise billing laws. For large employer plans, ER visits and in-network inpatient stays were both more likely to result in at least one OON charge in the following states:
- Texas
- New York
- Florida
- New Jersey
- Kansas
Individuals covered by large employer plans in Minnesota, South Dakota, Nebraska, Maine and Mississippi were less likely to receive an out-of-network bill. A vital change implemented following passage of the Affordable Care Act (ACA) provides some protection to patients that need emergency services that are OON: all non-grandfathered health plans have to apply in-network cost-sharing rates to these services and pay a significant amount for the OON emergency services. However, the ACA did not include provisions that would protect patients from balance billing by emergency service providers. The ACA also does not protect patients from balance billing for OON non-emergency care. This can prove a bigger burden for patients enrolled in HMO or EPO plans that do not cover OON non-emergency services.
State-Based Laws Against Balance Billing
According to The Commonwealth Fund, 9 states (California, Connecticut, Florida, Idaho, Illinois, Maryland, New Hampshire, New Jersey and New York) offer comprehensive protection against balance billing by OON providers in ERs or in-network hospitals:
- Protections to ERs and in-network hospital settings
- Laws are applicable to all insurance types, including HMO and PPO plans
- Protection against extra provider charges as well as balance billing
- Have in place a payment standard that determines insurer payments to providers or a dispute resolution process
States, however, have their hands tied when it comes to employer-based health coverage due to the Employee Retirement Income Security Act of 1974, commonly known as ERISA, which prevents state regulation of OON surprise bills, applying in-network cost-sharing charges and using state-established payment rules to settle OON payment disputes.
Many states have less comprehensive protection; e.g., some state laws may only protect against balance billing for emergency care but not for OON providers in in-network hospitals.
H.R. 2328 and S. 1895: The Bipartisan Bills
At the behest of President Trump, a bipartisan effort has vowed to end surprise medical bills. In July 2019, H.R. 2328 (the No Surprises Act) was approved by the House Energy and Commerce Committee by a voice vote and S. 1895 (the Lower Health Care Costs Act) was approved by the Senate Health Education Labor and Pension Committee, which has provisions to prevent surprise medical bills. Both bills apply to:
- OON emergency services claims
- Inpatient services post ER
- Non-emergency services at in-network care facilities by OON physicians and other care providers
Neither bill covers ground ambulance services. Both, H.R. 2328 and S. 1895 require the health plans to cover OON surprise bills and apply in-network cost-sharing rates. Both bills apply to individual and group health insurance plans, whether self- or fully insured, meaning plans that are beyond the state’s jurisdiction will fall within the scope of these federal bills.
Multiple media outlets have reported that leaders in both the House and the Senate may be close to a deal on the legislation.
