Two-thirds of bankruptcies filed in the United States are a result of medical expenses. It’s an alarming statistic, but probably not surprising. It’s no secret that many people have trouble paying out-of-pocket medical costs, so much so that a recent survey from The Commonwealth Fund found that 72 million Americans have some sort of trouble with medical debt.
It’s a common problem, but why? Let’s say a person visits a hospital, perhaps an emergency room, and receives a myriad of services. Maybe they arrived via ambulance or required treatment from an anesthesiologist. Although they may inquire about an estimate at the time of service or have an idea of their coverage, the exact financial responsibility is often a mystery. But what’s a person to do? They need medical assistance, and they need it at that moment. Then a surprise arrives in the mail in the form of an outrageously high medical bill. It’s something many of us have likely experienced.
What’s the cause of such an expense? Often the charge stems from using an out-of-network provider. Basically, this means that the hospital may have been in-network, but the physicians were not. Additionally, patients are often confused about medical coverage. Even with a good understanding of their benefits, situations may arise that are out of their control, and there may be unintended outcomes. Patients may (falsely) believe that all services rendered will be considered in-network when they go to an in-network facility. However, this isn’t always the case. In some instances, even though their physician is in-network, patients referred to specialists (such as a pathologist or radiologist) may discover the ancillary services were out of network. It is only after the patient receives a bill that they discover the issue. In the case of an emergency visit, patients don’t have the luxury of researching for in-network hospitals and typically go to the nearest hospitals. Patients may also be taken to out-of-network hospitals by ambulance. Researchers estimate that 1 in 6 emergency room visits and inpatient stays involve care from at least one out-of-network provider. The cost of out-of-network visits can have devastating financial consequences for the patient.
A 2019 study by the Government Accountability Office (GAO) found that the cost for air ambulance services clocked in at approximately $40,000. A large portion of this cost (over 70 percent) often fell out-of-network, meaning that the balance usually was placed on the consumer. When such a service is needed, it’s understandable to not have the option to “shop around” for a cheaper, in-network alternative.
Thankfully, help is on the way. Leaders and policy makers at the federal level have taken steps to tackle the issue. On July 1, 2021, the Biden Administration announced a new rule aimed at protecting consumers from surprise medical bills. In conjunction with the Department of Health and Human Services (HHS), together with the Departments of Labor and Treasury and the Office of Personnel Management, debuted “Requirements Related to Surprise Billing; Part I.”
This announcement, the first in a series, will go into effect on January 1, 2022 and protect patients from those all-too-common surprise medical bills. It’s an important step forward in protecting patients.
“No patient should forgo care for fear of surprise billing,” stated HHS Secretary Xavier Becerra. “With this rule, Americans will get the assurance of no surprises.”
Let’s dive into the new regulation. Among other provisions, the rule:
- Protects patients from surprise billing in emergency services. These provisions will safeguard patients in emergency care situations from unknowingly accepting out-of-network care and incurring unexpected expenses.
- Limits out-of-network cost sharing. Patient cost-sharing for emergency and non-emergency services, such as a deductible, cannot be higher than if provided by an in-network provider. Simply put, co-insurance or deductibles must be based on in-network rates.
- Bans out-of-network charges for ancillary care. Previously, out-of-network providers like anesthesiologists could have been assigned, even though the facility or physician was in-network.
- Requires that providers and facilities provide patients with accurate cost information and advance notice of any out-of-network charges for non-emergency services. A consumer notice must explain that patient consent is required to receive care on an out-of-network basis before that provider can bill at the higher out-of-network rate.
- Allows providers and insurers access to a dispute resolution process should reimbursement issues arise around reimbursement.
With the increase in high deductible health plans and increased out of pocket costs, finances are top of mind. From the consumer’s standpoint, gaining healthcare services will be less stressful. On the simplest level, this ruling will hopefully eliminating those hefty surprise bills, which can only be seen as a positive. Moving forward, patients can rest assured that they will be more aware of expenses and will avoid out-of-network charges for emergency care.
So can consumers finally say goodbye to surprise medical bills? Hopefully they become a thing of the past. And how will this bill affect the future of the industry? Advocates are hoping these regulations and newfound transparency will eventually lower costs, for one. More importantly, it shines light on the need to improve the overall patient experience. It’s a step in the right direction and has the potential to improve healthcare policies going forward for years to come.
