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.
Of note: Ground ambulances are not included in this law, meaning three out of four insured people who take an ambulance ride are still at risk of facing surprise bills.
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.