On Jan. 1, 2022, the federal No Surprises Act (the Act) took effect. 1 1 www.congress.gov/116/bills/hr133/BILLS-116hr133enr.pdf. The No Surprises Act amends the Internal Revenue Code of 1986 as well as the Public Health Service Act. 26 U.S.C. § 223. The Act diminishes or eliminates the pain associated with unexpected or “surprise” medical bills when health care plans deny out-of-network claims or apply higher out-of-network cost-sharing. Surprise medical bills can arise when a patient, typically an enrollee in a group insurance plan, is treated in an out-of-network facility for emergency care or with an out-of-network provider at an otherwise in-network facility. Surprise bills hurt because out-of-network services are associated with higher deductibles, copayments, and out-of-pocket limits. Despite informed and vigilant efforts to stay within their health care plan’s network, otherwise “covered” patients have received unforeseen charges even for care provided at an “in-network” hospital. COVID-19 not only overwhelmed the country’s health care infrastructure but added to the surprise billing problem.
While several states—including Washington, Oregon, and California—enacted protections against surprise billing before the Act took effect, the inability of the states to regulate self-insured group health plans left many enrollees unprotected. This spurred Congress to pass the No Surprises Act, bridging the gaps left by well-intentioned yet piecemeal state legislation that could not regulate employers’ self-insured plans. The impact of the Act on how costs for medical care in our country are processed and funded extends well beyond simply banning surprise medical bills. It takes the medical consumer out of the dispute and brings predictability to providers and payors. The Act also provides a dispute resolution system for addressing disagreements between payors and providers when charges for medical services can no longer be passed on to the patient.
Many academics and analysts prefer using the term “balance bill,” over “surprise bill,” to describe the associated costs when a plan enrollee seeks or requires out-of-network medical care. Whether referred to as a surprise or a balance bill, the patient’s insurance company (payor) pays only part of a bill, leaving the provider to bill the patient for the unsatisfied remainder, or the “balance.” Surprise bills usually come about when the insurance plan enrollee receives emergency care at an out-of-network facility or with an out-of-network provider at an otherwise in-network facility. Not only can the payor refuse to cover the entire bill, out-of-network services typically have higher deductibles, copayments, and out-of-pocket limits. Patients insured by public programs such as Medicare, Medicaid, and TRICARE are generally protected from balance bills.
Naomi Ahsan is an associate at Preg O’Donnell & Gillett.
William Cornell is a member of Preg O’Donnell & Gillett and a mediator/arbitrator with Pacific ADR.
NOTES
1. www.congress.gov/116/bills/hr133/BILLS-116hr133enr.pdf. The No Surprises Act amends the Internal Revenue Code of 1986 as well as the Public Health Service Act.
2. “Surprise! It’s a $164,000 Bill for Your Heart Attack,” Commonwealth Fund, The Dose podcast, available at www.commonwealthfund.org/publications/podcast/2019/apr/surprise-its-164000-bill-your-heart-attack.
3. Chad Terhune. “Life-Threatening Heart Attack Leaves Teacher With $108,951 Bill,” NPR Morning Edition, Aug. 27, 2018.
5. Jack Hoadley, Kevin Lucia, Katie Keith. “Keeping surprise billing out of coronavirus treatment.” Health Affairs. April 2, 2020. Accessed February 23, 2021. www.healthaffairs.org/do/10.1377/hblog20200330.353921/full/.
6. Karen Pollitz. “Consumer Appeal Rights in Private Health Coverage,” KFF (Kaiser Family Foundation), Dec. 10, 2021, available at www.kff.org/private-insurance/issue-brief/consumer-appeal-rights-in-private-health-coverage/.
7. Id.
8. Samantha Liss. “Private equity sees ripe opportunity in healthcare this year,” Healthcare Dive, March 25, 2019, available at www.healthcaredive.com/news/private-equity-sees-ripe-opportunity-in-healthcare-this-year/548831/.
9. John Tozzi. “Air ambulances are flying more patients than ever, and leaving massive bills behind,” Bloomberg, June 11, 2018; Christopher Roland. “Why the flight to the hospital is more costly than ever,” Washington Post, July 1, 2019.
12. Id.
13. See supra note 5.
14. Karen Pollitz, Matthew Rae, and Salem Mengistu. “Claims Denials and Appeals in ACA Marketplace Plans in 2020,” KFF (Kaiser Family Foundation), Jul. 5, 2022.
15. See supra note 2.
