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When Izzy Benasso suffered a knee injury from a game of tennis, she underwent surgery, later receiving a total bill of $96,377 from Sky Ridge Medical Center in Lone Tree, Colorado. After several adjustments and discounts by the hospital, Izzy was billed $3,567.30 for the service. As Izzy was covered under her father’s insurance, the hospital accepted a $3,216 payment from the insurance and her copay of $357.40 as payment in full. The Benassos assumed the transaction was complete until the surgical assistant outside of their insurance network attempted to charge the Benassos with another bill of $1,167. This story was originally reported by Kaiser Health News – Bill of the Month – in July 2020.
Surprise medical bills like this have become all too common. In the past two years, one in five insured Americans reported receiving at least one – usually large – surprise medical bill. Evidence shows surprise medical bills are one of the main reasons many Americans incur medical debt and delay care. Poll after poll shows surprise medical bills are what people fear most, more than they worry about prescription drug costs, premiums and other cost-sharing requirements, or other costs of goods and services (such as rent, food, utilities, and transportation). The COVID-19 pandemic has deepened this fear, as the odds of patients receiving surprise medical bills increase across all phases of COVID-19 testing, treatment and vaccination, and from receiving care at out-of-network hospitals because of overcrowding at in-network facilities.
Thanks to bipartisan efforts, federal policy makers passed and signed into law the No Surprise Act (as part of the omnibus spending bill passed and signed into law on December 27, 2020) that makes great strides in protecting consumers from the unfair and harmful practice of surprise medical billing. Although 17 states have taken action to protect their state residents, this federal legislation now benefits everyone across the country, regardless of which type of private insurance plan they have (including those enrolled in self-funded health plans) and extends these protections to federally regulated providers such as air ambulances.
As consumer advocates, consumer protections are our number one priority. Together with our state and national partners, we have advocated for holding consumers harmless from surprise medical bills at both the state and federal levels for over five years. We are pleased that the No Surprise Act addresses most of our concerns. Beginning on January 1, 2022, patients will be protected from being balance billed in most situations where they cannot reasonably be expected to ensure they are receiving in-network care. This means in these surprise situations, patients are only responsible for the cost-sharing amounts (i.e., copayment, coinsurance and deductibles) specified under their health insurance policy.
In terms of setting reimbursement rates for surprise out-of-network services, providers and insurers will have the opportunity to resolve their payment dispute through arbitration. We are encouraged that federal policy makers have made an effort to contain high health insurance premiums and overall health care costs by prohibiting the use of providers’ billed charges – which are often subject to arbitrary increases – as the criteria for the arbitrator to determine the final out-of-network payment rate. (See an in-depth analysis of the No Surprise Act from policy experts at Georgetown University Health Policy Institute here.)
No compromise is perfect. We remain concerned about out-of-network balance bills for ground ambulances. A study conducted in April 2020 found that 98 percent of 1,498,600 ambulance encounters that involved potential surprise bills were ground ambulances. While the No Surprise Act extends protections to air ambulances – thanks to strong consumer advocacy – it only calls for a special advisory committee to recommend ways to best protect patients from surprise medical bills and improve transparency for ground ambulances.
The No Surprise Act is poised to offer protections to millions of individuals and families across the country. This victory is a testimony of collective advocacy efforts from consumer health advocates across the country. We are looking forward to working with the Biden-Harris administration on implementation to ensure that people are aware of these new protections; address any issues that have negative impacts on access, premiums and overall health care costs; create a pathway to navigate noncompliance issues; and put in place policies to end surprise medical bills from ground ambulance service providers.