Surprise Billing

Surprise medical bills (“surprise billing”) occur when a patient receives an unanticipated bill due to unexpected gaps in health insurance coverage, such as when a patient receives care from an out-of-network provider or when their insurance plan does not pay for covered services. These gaps are most likely to occur when:

  • Patients receive emergency care outside of their insurance network (e.g., when traveling out of state)
  • Patients receive care from an out-of-network doctor at an in-network hospital or facility (e.g., the hospital and surgeon are in-network, but the anesthesiologist is out-of-network)
  • The patient’s insurance plan says an emergency service was unnecessary and thus denies payment (e.g., trip to the emergency room for severe abdominal pain)

FAH firmly believes patients should be protected from surprise medical bills, held to their in-network cost-sharing and removed from any payment disputes between health plans and health care providers. FAH also believes that any policies addressing surprise billing should preserve the role of private negotiation, ensure patient access to emergency services and comprehensive networks, and support state laws that work.

As such, FAH applauds the work of Congress in passing the No Surprises Act as part of the December 2020 omnibus package. While not perfect, this legislation first and foremost protects patients by prohibiting surprise billing and by limiting patients’ cost-sharing for unexpected out-of-network services to their in-network amounts starting in 2022.

In addition to protecting patients, the legislation also lays out a framework for heath insurance plans and out-of-network health care providers to resolve payment disputes. This includes a period of negotiation during which the plan and the provider can work to determine a fair payment amount. If they are unable to reach a negotiated agreement, then they may utilize the independent dispute resolution (IDR) process, which was set forth in the law and will be established via forthcoming regulations. The IDR process is modeled after the “baseball-style arbitration” process, where the health plan and the health care provider will each submit their offer for the reimbursement amount, along with any supporting information, and the arbiter will select one of the offers. This process is meant to provide a backstop — enabling a fair reimbursement amount for health care providers and preventing health insurance plans from underpaying for out-of-network services provided to their enrollees.

How well the negotiation and IDR processes work in part depends on the implementation of the No Surprises Act, which will be done via rulemaking from the Departments of Health and Human Services, Labor and Treasury, as well as interaction of this new federal law with existing state surprise billing laws. It is imperative that any implementing regulations allow for a fair reimbursement process while limiting the burden on patients and health care providers and protecting state laws that work.

FAH looks forward to engaging with regulators to implement these vital policies.