What does the new law on surprise medical bills do?
The “No Surprises Act” – legislation to protect people from unfair and costly surprise medical bills –was included in the year-end appropriations and COVID-19 relief package (H.R. 133) signed into law on Dec. 27, 2020.
What is a surprise medical bill, and why do they happen?
A surprise medical bill is an unexpected bill a consumer receives from an out-of-network doctor after receiving services at a facility the patient chose because it is in his or her health plan’s network or from an out-of-network facility during an emergency. Often, the patient does not know care was being provided by someone out-of-network. For example, if a pregnant woman goes to a hospital to deliver a baby, she will typically have chosen the doctor delivering her baby, but not the anesthesiologist giving her pain medication. If the anesthesiologist is not in-network, she may receive a separate, unanticipated bill from the anesthesiologist. That’s a surprise medical bill, also referred to as a balance bill. These bills can amount to hundreds—even thousands—of dollars because even if the patient has coverage for out-of-network services, he or she may still receive a bill for costs above the insurance company’s reimbursement.
How does the new law protect patients from surprise bills?
The law is intended to take consumers out of the middle when there is a dispute about out-of-network charges or balance bills. Beginning Jan. 1, 2022, it prohibits balance billing patients who receive unexpected out-of-network care, including air ambulance services. As a result, patients in emergency situations and certain non-emergency situations who aren’t able to choose an in-network provider will only be responsible for in-network costs, including customary out-of-pocket expenses, like deductibles. However, certain clinicians may continue to balance bill if they give the patient notice of their network status and an estimate of charges 72 hours prior to receiving out-of-network services, the patient has options for in-network care at the facility and the patient consents to receive the out-of-network care.
Insurers and clinicians will negotiate to settle out-of-network charges. If they can’t agree, a new, independent dispute resolution (IDR) process—or arbitration—will be used.
Will this keep health care costs down?
The Blue Cross Blue Shield Association is pleased Congress has taken a first step toward protecting people from surprise medical bills. But a complex arbitration process has proved ineffective in states that have tried it. The process still gives an incentive for clinicians to remain out-of-network and holds the potential to raise premiums for everyone as payments escalate beyond what a network rate would be.
As the new law is implemented, the Coalition Against Surprise Medical Billing, which represents leading employer groups, health insurers* and health organizations, is urging regulators to prioritize lowering consumers’ health care costs and preventing exploitation of the new arbitration system.
* The Blue Cross Blue Shield Association is a member of the Coalition Against Surprise Medical Billing.
Additional resources on surprise bills:
- Read our statement on the 2020 year-end, COVID-19 relief package, which addresses surprise billing.
- See our fact-checked arguments, separating the myths from the facts.
- See more of our fact-checked arguments and download an at-a-glance myths vs facts.
- Read more on how a payment benchmark has positive impacts for network participation.