Surprise! Congress Passes Legislation Banning Surprise Medical Bills
Shannon Benton, Executive Director
Last year, more than one-fourth of participants in TSCL’s Senior Survey reported that they had received a “surprise” medical bill in the past 12 months. While surprise medical bills can refer to any number of situations, including a sudden cost increase for prescriptions, recent legislation passed in December of 2020 addresses a certain type. Specifically, medical bills that a patient unexpectedly receives when treated by an out-of-network provider at an in-network facility.
This is a problem that affects retirees enrolled in Medicare Advantage plans much more so than those who have Medigap supplemental coverage which allows enrollees to see any provider that accepts Medicare. To reduce the costs of care, and to keep premiums low for consumers, Medicare Advantage plans (and health plans covering adults younger than 65) contract with doctors and hospitals to create networks. Cost is a predominant concern and, in the process, plans create networks that exclude higher cost providers.
This creates problems especially in emergency room visits when the patient may require pricey services such as those from an air ambulance, doctor or other provider that does not have a contract with the patient’s Medicare Advantage plan. When health plans get such bills, they can reject the claim and patients wind up on the hook for the “balance bill.” While the average emergency room visit is just above $600, some patients have received surprise bills greater than $100,000 from out-of-network providers.
Consequently, surprise billing is universally loathed. More than eighty percent of participants in TSCL’s 2020 Senior Survey wanted Congress to prohibit surprise medical bills, and the legislation that was signed into law in December prohibits this practice.
It’s not perfect — we still have a year to go before implementation starts. However, starting in 2022, consumers will no longer receive surprise or “balance bills” when they are unknowingly treated by out-of-network providers. Patients will pay only the deductible and copayment amounts they ordinarily would under the in-network terms of their insurance plans. Medical providers will not be allowed to hold patients responsible for difference between the amount they get and the higher fees they would like to charge. Instead providers will have to work that out with insurers.
While that part is good news for consumers, TSCL is closely watching to see how these changes may impact Medicare Advantage premiums and emergency room co-insurance costs. And unfortunately, drug costs are likely to continue to shock us unless Congress takes action to address that next!
Sources: “The Underlying Causes Of Surprise Medical Bills,” David Blumenthal and Shanoor Seervai, The Commonwealth Fund, April 26, 2019. “Surprise! Congress Takes Steps To Curb Unexpected Medical Bills,” Julie Appleby, Kaiser Health News, December 22, 2020, “Surprise Medical Bills Cost Americans Millions. Congress Finally Banned Most Of Them.” Sarah Kliff and Margot Sanger-Katz, The New York Times, December 22, 2020.