WASHINGTON (AP) – The Biden administration on Thursday finalized consumer protections against so-called “surprise” medical bills. Officials said the ban on charges affecting insured patients at some of the most vulnerable moments of life is set to take effect from January 1.
Patients will no longer have to worry about receiving a huge bill after a medical crisis if the nearest hospital emergency room is outside their insurance plan’s provider network. They will also be protected against unexpected charges if an out-of-network physician attends a surgery or procedure performed in an in-network hospital. In such situations, patients will be liable only for their in-network cost sharing amount.
Rules released Thursday outlined for the first time an important part of the new system: an behind-the-scenes dispute resolution process that hospitals, doctors and insurers would use to extort fees without dragging patients into it.
When an insurer and a service provider disagree on a fair payment, either party can initiate a 30-day negotiation process. If they still cannot come to an agreement, they can take the matter to an independent arbitrator.
The intermediary will use a set amount as a guide that aims to balance the value of medical services provided and the cost to keep out of control. A clear justification would be needed to make the final payment higher or lower.
There will also be a new way for uninsured people and patients who pay their own way to get an estimate of fees for medical procedures, as well as a process for them to resolve billing disputes.
“We are hoping to give a sigh of relief to people who have been blinded by the billing,” said Health and Human Services Secretary Javier Becerra.
While surprise medical bills have been a common problem for people with health insurance, it’s even more troubling as most patients would have thought they were safe. Fees running into the hundreds to tens of thousands of dollars came from doctors and hospitals outside the network of patients’ health insurance plans.
It is estimated that approximately 1 in 5 emergency visits and 1 in 6 patient admissions triggered an astonishing bill.
Although surprise billing is already banned in many states, federal action was needed to protect patients covered by large employer plans, which are regulated nationally. A 2020 law signed by then-President Donald Trump laid out a bipartisan strategy to address the issue, and the Biden administration filled in important details.
The idea was to take patients and their families out of the financial equation by allowing them to be billed for out-of-network services based on an in-network fee. That amount is counted in their in-network annual deductible.
The new protection of the law aims to:
- Protecting patients from accidental bills arising from emergency medical care. Protection applies if the patient is seen at an out-of-network facility, or if they are treated by a physician at an out-of-network hospital. In any case, the patient may only be billed based on their plan’s in-network rate.
- Protecting in-network hospitalized patients for a planned procedure when an out-of-network physician is involved and collects bills.
- Out-of-network service providers are required to give patients 72 hours’ notice of their estimated charges. Patients must agree to bill for the hospital or doctor they receive in order to receive out-of-network care.
- Preventing air ambulance services from sending surprise bills to patients for more than the amount of in-network cost sharing.
Before the ban on surprise billing, patients usually had to take the initiative to collect unexpected charges on their own. In many cases the hospital or doctor went back and forth with the insurance company until they reached an agreement. But there was no guarantee that this would happen, and patients were at risk of being placed in collection proceedings in situations over which they had no control.
Some health care industry groups have urged the Biden administration to take more time to set up the new arbitration system. Officials said Thursday that they are committed to an effective January 1 date and said 50 organizations have expressed interest in taking on the role of mediators.