Effective today, federal law bans many types of out-of-network medical bills and puts the onus on doctors and health insurance companies to resolve their payment disputes.
Why it matters: Consumers can breathe a sigh of relief because, in many scenarios, they should no longer face unexpected charges from doctors who are not in their insurance networks.
How it works: Patients still have to pay in-network copays, deductibles and other cost-sharing, which have been rising, but any additional out-of-network bills are now prohibited for the following services:
- Emergency care in a hospital ER, a freestanding ER or urgent care center.
- Elective care at an in-network hospital or surgery center, but where doctors — notably anesthesiologists, pathologists, radiologists and assistant surgeons — may be out-of-network. This is also known as “drive-by doctoring.”
- Air ambulances.
Behind the scenes: Instead of sending out bills, doctors and insurance companies have to resolve their differences while holding the patient harmless.
- If the two sides can’t agree on a payment rate within 30 days, either side can request the federal arbitration process.
- The doctor and insurer then go to the arbiter with their best offer, and the arbiter picks one.
An important point: The arbiter “must select the offer closest” to the median in-network rate unless other information “clearly demonstrates” the median in-network rate isn’t appropriate, according to the government.
- A host of medical providers, including the American Hospital Association and American Medical Association, are suing the government. They argue the median in-network rate shouldn’t be the guiding factor for the arbiter, and the government went against Congress’ intent by doing so.
- Consumer protection experts have criticized the lawsuits, saying medical providers don’t want guardrails on the arbitration system so they can extract higher rates.
Between the lines: Because this is a new law, we should expect the health care system won’t get everything right.
- “We need to be active bill readers and ask a lot of questions to our providers and insurance companies if there’s a bill we don’t think we should be paying,” said Patricia Kelmar, the health care director at consumer protection group U.S. PIRG.
- Patients can direct complaints online or through a 1-800 number.
- Out-of-network doctors also must inform patients about what their care might cost, and they may ask patients to sign a form that waives their protections. (Be leery of signing this, consumer rights experts say.)
The bottom line: The law will save a lot of patients from financial ruin. But a lot of gaps remain in the health care system.
Have you been hit with a large or unexpected medical bill? Maybe the overall medical billing experience left you feeling puzzled or upset? Email email@example.com, so we can dig into what’s happening as part of Axios’ new series, Billed and Confused.