Congress to Ban Surprise Medical Billing

After years of being stymied by well-funded interests, Congress has agreed to ban one of the most costly and exasperating practices in medicine: surprise medical bills.

Surprise bills happen when an out-of-network provider is unexpectedly involved in a patient’s care. Patients go to a hospital that accepts their insurance, for example, but get treated there by an emergency room physician who doesn’t. Such doctors often bill those patients for large fees, far higher than what health plans typically pay.

Language included in the $900 billion spending deal reached Sunday night and headed for final passage on Monday will make those bills illegal. Instead of charging patients, health providers will now have to work with insurers to settle on a fair price. The new changes will take effect in 2022, and will apply to doctors, hospitals and air ambulances, though not ground ambulances.

Academic researchers have found that millions of Americans receive these types of surprise bills each year, with as many as one in five emergency room visits resulting in such a charge. The bills most commonly come from health providers that patients are not able to select, such as emergency room physicians, anesthesiologists and ambulances. The average surprise charge for an emergency room visit is just above $600, but patients have received bills larger than $100,000 from out-of-network providers they did not select.

Some private-equity firms have turned this kind of billing into a robust business model, buying emergency room doctor groups and moving the providers out of network so they could bill larger fees. (...)

A survey published Friday by the Kaiser Family Foundation found that 80 percent of adults want the practice banned. More than a dozen states, including Texas and California, have passed bans of their own on surprise billing.

Even so, the issue struggled to move through Congress as each policy proposal faced an outcry from some faction of the health care industry.

“There were a lot of things working in the legislation’s favor — it’s a relatively targeted problem, it resonates very well with voters, and it’s not a hyperpartisan issue among voters or Congress — and it was still tough,” said Benedic Ippolito, a resident scholar at the American Enterprise Institute, who helped explain the issue to lawmakers early in the process. “It has almost everything going for it, and yet it was still this complete slog.”

Hospitals and doctors, who tend to benefit from the current system, fought to defeat solutions that would lower their pay. Insurance companies and large employer groups, on the other hand, have wanted a stronger ability to negotiate lower payments to the types of medical providers who can currently send patients surprise bills.

Legislation nearly passed last December, but was scuttled at the 11th hour after health providers lobbied aggressively against the deal. Private-equity firms, which own many of the medical providers that deliver surprise bills, poured tens of millions into advertisements opposing the plan. Committee chairs squabbled over jurisdictional issues and postponed the issue.

This year, many of the same legislators behind last year’s failed effort tried again, softening several provisions that had been most objectionable to influential doctor and hospital lobbies. The current version will probably not do as much to lower health care spending as the previous version, but will still protect patients.

After years of defeats, consumer advocacy groups cheered the new legislation.

by Sarah Kliff and Margot Sanger-Katz, NY Times | Read more:
Image: Anna Moneymaker

[ed. Give it a couple years, we'll see. See also: Why Ambulances Are Exempt From the Surprise-Billing Ban (NYT).]