Most Americans tell pollsters they're worried about being able to afford an unexpected medical bill.

Late Sunday, Congress passed a bill to allay some of those fears. The measure is included in a nearly 5,600-page package providing coronavirus economic relief and government funding for the rest of the fiscal year.

Specifically, the legislation addresses those charges that result from a long-running practice in which out-of-network medical providers — from doctors to air ambulance companies — send insured Americans "surprise bills," sometimes for tens of thousands of dollars.

The legislation itself was a bit of a surprise, coming after two years of debate that featured high-stakes lobbying by all who stood to gain or lose: hospitals, insurers, patient advocacy groups, physicians, air ambulance companies and private equity firms, which own a growing number of doctor practices. A similar effort failed at the last minute a year ago after intense pressure from a range of interests, including those private equity groups.

This time around, no group got everything it wanted. Lawmakers compromised — mainly over how to determine how much providers will ultimately be paid for their services.

"No law is perfect," says Zack Cooper, an associate professor of public health and economics at Yale who studies health care pricing. "But it fundamentally protects patients from being balance-billed. That's a remarkable achievement," he says. (Balance billing is when out-of-network medical providers bill patients for amounts their insurer did not cover.)

The bottom line: Patients may still be surprised by the high cost of health care overall. But they will now be protected against unexpected bills from out-of-network providers.

Here's a rundown on what this legislation means for consumers:

Fewer Surprise Bills

Starting in 2022, when the law goes into effect, consumers won't get balance bills when they seek emergency care, when they are transported by an air ambulance, or when they receive non-emergency care at an in-network hospital but are unknowingly treated by an out-of-network physician or laboratory.

Patients will pay only the deductibles and copayment amounts that they would under the in-network terms of their insurance plans.

Medical providers won't be allowed to hold patients responsible for the difference between those amounts and the higher fees they might like to charge. Instead, those providers will have to work out with insurers acceptable payments. For the uninsured, for whom everything is out of network, the bill requires the secretary of the department of Health and Human Services to create a provider-patient bill dispute resolution process.

The measure takes aim at situations in which patients have little choice about whether they are in network, including emergencies. A recent survey found 18% of emergency room visits, on average, resulted in at least one surprise bill. (A growing number of emergency rooms are staffed by private equity-owned agencies that sign few in-network agreements.)

The legislative agreement also applies to non-emergency care provided at in-network facilities, where patients receive care and services from out-of-network providers, such as anesthesiologists and laboratories.

Also included in the bar on balance billing is air ambulance transportation, which is among the most expensive medical services, often costing tens of thousands of dollars.

Still, the bill does not extend its consumer protections to the far more commonly used ground ambulance services. But it does call for an advisory committee to recommend how to take this step.

An Option for Consumers to Agree to Balance Billing

In some cases, physicians can balance-bill their patients, but they must get consent in advance.

This part of the bill is aimed at patients who want to see an out-of-network physician, perhaps a surgeon or obstetrician recommended by a friend.

In those cases, physicians must provide a cost estimate and get patient consent at least 72 hours before treatment. For shorter-turnaround situations, the bill requires that patients receive the consent information the day the appointment is made.

In a sense, though, this provision allows consumers to forfeit protection.

Health providers "have to give you a good-faith cost estimate. If you sign that, then you can be billed whatever that physician wants to bill you," says Jack Hoadley, research professor emeritus in the Health Policy Institute at Georgetown University.

The legislation allows this only in non-emergency circumstances and bars many types of physicians from the practice. Anesthesiologists, for example, can't seek consent to balance-bill for their services, nor can radiologists, pathologists, neonatologists, assistant surgeons or laboratories.

Payment Will Be Sorted Out in Negotiations

While lawmakers agreed that patients will be held harmless, the real fight was over how to decide what amounts providers would be paid by insurers.

Some groups — including hospitals and physicians — opposed any kind of benchmark or standard to which all bills would be held. On the other side, insurers, employers and consumer groups argued for a benchmark, warning that, without one, providers would angle for much higher payments.

The legislation carves out some middle ground.

It gives insurers and providers 30 days to try to negotiate payment of out-of-network bills. If that fails, the claims would go through an independent dispute resolution process with an arbitrator, who would have the final say.

The bill does not specify a benchmark, but it bars physicians and hospitals from using their "billed charges" during arbitration. Such charges are generally far higher than negotiated rates and bear little or no relation to the actual cost of providing the care.

That was considered a win for insurers, employers and consumer advocates, who argued that allowing billed charges would mean higher prices — potentially driving up premiums — in cases sent to arbitration.

Billed charges "are totally made up" by providers, says Cooper, at Yale. "So, the big deal is that arbitrators are not considering charges."

But hospitals and doctors won a limit they sought, too.

In last-minute changes over the weekend, they succeeded in barring consideration of Medicare or Medicaid prices during arbitration. Those government payments are often far lower than the negotiated rates paid by insurers and self-insured employers.

Instead, the bill says negotiators can consider the median in-network prices paid by each insurer for the services in dispute. Other factors, too, can come into play, including whether the medical provider tried to join the insurers' network, and how sick the patient was compared with others.

It also allows consideration of network rates a provider may have agreed to during the previous four years, which might help some high-priced services, such as air ambulances, remain costly even in arbitration.

Overall, the legislation "did include some wins for provider groups," says Loren Adler, associate director at the USC-Brookings Schaeffer Initiative for Health Policy.

Even so, he expects the legislation will help insurers contain some prices and provide "some downward pressure on premiums, even if relatively minor at the end of the day."

State Laws May Change

More than 30 states have enacted some type of surprise billing protections, but only 17 are considered comprehensive, according to the Commonwealth Fund.

Comprehensive states — California, New York and New Mexico, for example — extend protections to cover non-emergency situations at in-network hospitals, but that isn't the case in less comprehensive states, the fund noted.

And state laws have another limitation: They apply only to certain types of insurance, and often do not cover Americans who get their health insurance through self-insured employers, which tend to be midsize to large companies because they fall under federal rules.

But the new federal rules will cover most types of insurance plans, including those offered by self-insured employers.

"States can't fully deal with these situations, but this covers it," says Hoadley, at Georgetown.

Still, some provisions in state law, such as how to determine a payment, differ from the federal law. In such cases, the federal law defers to states.

Statehouse lawmakers may eventually alter their legislation or adopt new proposals to avoid confusion, said policy experts. If they don't, they could be left with rules that affect people differently depending on whether their insurance comes through a large self-insured employer or directly from an insurance plan subject to state law.

"I would be surprised if, over time, states don't just glom onto the federal law," says Adler.

KHN (Kaiser Health News) is a nonprofit news service covering health issues. It is an editorially independent program of KFF (Kaiser Family Foundation) that is not affiliated with Kaiser Permanente.

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