Taking the Surprise out of Surprise Medical Bills

A word people often like to hear – until it involves medical bills that they did not expect.

Surprise medical billing, also known as balance billing, happens when an insured patient receives care from a provider that is out of their insurance network. This can happen when they go to an in-network facility for a procedure. The doctor is in-network, but the anesthesiologist may not be, resulting in a surprise charge. There are two components that can affect how much a patient is charged. The first is the higher cost-sharing requirements from insurance companies for out-of-network (OON) versus in-network care. The second part deals with the insurer. If their rate does not cover the provider’s full rate, the OON provider can bill the patient directly for the remainder – unless state law prohibits that billing. 

And based on a recent Executive Order, the president is taking another crack at getting rid of surprise medical billing.

On September 24, 2020, President Donald Trump signed the Executive Order on An America-First Healthcare Plan. This order addresses surprise billing, among other healthcare issues, with the purpose of bringing healthcare to Americans and putting patients first by taking steps to improve the efficiency and quality of healthcare in our country.

While the Executive Order does nothing to the current laws, it does make reference to the four principles from the Trump Administration’s May 9, 2019 Fact Sheet, “President Donald J. Trump Wants to Protect Patients and Their Families from Surprise Billing.” Those principles are:

1.       Patients receiving emergency care should not be forced to shoulder extra costs billed by a care provider but not covered by their insurer.

2.       Patients receiving scheduled care should have information about whether providers are in or out of their network and what costs they may face.

3.       Patients should not receive surprise bills from OON providers they did not choose.

4.       Federal healthcare expenditures should not increase. It also recognizes the fact that while there has been federal legislation under consideration to prohibit surprise billing for years, nothing has been signed into law, and President Trump is pushing for a solution by the end of 2020. The Executive Order calls for congress to reach a legislative solution by December 31, 2020. It goes on to state that if a solution is not reached by that time, the Secretary of Health and Human Services is to take administrative action to prevent a patient from receiving a bill for out-of-pocket expenses that they could not have reasonably foreseen.

What does this mean for hospitals and providers?

That is a good question that still has not been answered. According to a recent National Law Review article, there are currently at least seven outstanding bills that aim to prohibit surprise billing for all emergency care, and most bills would also prohibit it for non-emergency services where treatment is at an in-network facility by an OON provider. Under the pending legislation, patients are responsible for in-network cost-sharing that counts toward deductibles. Most of the bills create a federal benchmark based on median in-network rates by payer, and if there is a dispute, there are arbitration provisions that can be followed.

With just months until the deadline set by President Trump there isn’t much time for Congress to make headway, especially with the country dealing with the COVID-19 pandemic. A Fierce Healthcare article on the topic included comments from Alex Azar, Department of Health and Human Services (HHS) Secretary, saying that HHS is working to determine what regulatory avenues it may be able to use to address surprise billing, but offered no details beyond that. The article went on to say Azar also didn’t endorse any particular legislative approach to address surprise billing, instead saying that the parties involved should work it out themselves.

The upcoming election could have an impact on this order, but only time will tell. Americollect will continue to monitor the situation and keep you updated on the latest news.