Study and Update on Surprise Medical Bills

 Friday, February 14, 2020

A study published in JAMA found that 20.5 percent of patients that had one of seven common elective surgeries performed by an in-network surgeon at an in-network hospital received a surprise medical bill. Researchers from the University of Michigan and Harvard Medical School studied claims data from a major health insurer from Jan. 2012 to Sep. 2017 and found that the average surprise bill for patients in these scenarios was $2,011. The study found that the reason for the surprise medical bills was due to a member of the surgical team, such as a surgical assistant or anesthesiologist, being out-of-network even if the primary surgeon was in-network.

The U.S. House Ways and Means Committee this week approved, as amended, the hospital-supported Consumer Protections Against Surprise Medical Bills Act. The bill would prevent providers from balance billing patients for medical care that they reasonably could have expected to be in-network and from charging patients more than the in-network cost-sharing amount. The bill would also provide a period for health plans and providers to negotiate out-of-network reimbursement and includes other consumer protection and transparency provisions. The Congressional Budget Office (CBO) estimated that the legislation would decrease the federal deficit by $17.8 billion through lower premiums and lower payments to some providers. The CBO stated “in facilities where surprise bills are likely, average payment rates for both in and out-of-network care would move toward the median in-network rate, which tends to be lower than average rates. CBO and JCT estimate that in most affected markets in most years, lower payments to some providers would reduce premiums by between 0.5 percent and 1 percent. Lower costs for health insurance would reduce federal deficits because the federal government subsidizes most private insurance through tax preferences for employment-based coverage and through the health insurance marketplaces established under the Affordable Care Act.”

Also this week, the House Education and Labor Committee reported an amended version of its proposal, which includes a median in-network rate to resolve out-of-network payments, a provision strongly opposed by hospitals. For amounts paid above $750 (or $25,000 for air ambulance services), the legislation allows for an independent dispute resolution process to determine the final payment.

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