The No Surprises Act was supposed to do away with Surprise Medical Bills. It is a poorly conceived law that requires out-of-network providers to duke it out with health plans though a cumbersome arbitration process if they cannot agree on a fee. As an economist I could go into a diatribe about why fees should be negotiated ahead of time rather than after-the-fact. Ahead of time would not require an arbitrator, whereas after-the-fact often does.
The No Surprises Act (NSA) banned balance billing, where patients were required to pay the balance between what doctors [they did not choose] charge versus what their health plans are willing to pay for a service. In that regard it was relatively effective. Unfortunately, balance bills are not the only surprises patients encounter. At least in theory, patients have some protection from outrageous bills if they ask for a quote several days in advance. However, implementation of this part of the NSA has been delayed and erroneous estimates mostly ignored, according to the Kaiser Family Foundation (KFF) Health News.
Jessica Chen, a woman KFF interviewed, was quoted a fee of $359 to investigate a lump in her breast. She later discovered the negotiated priced on the hospital website was listed as $302. She has no clue (nor would the hospital explain) why she received an additional bill for $1,677.51. When she filed a complaint with the Centers for Medicare and Medicaid Services, she was told the NSA provided her with no protection and the agency could not help. The following is from KFF Health News:
Here’s the problem: While the No Surprises Act has been a phenomenal success in taking on some unfair practices in the wild West of medical billing, it was hardly a panacea.
In fact, the measure protected patients primarily from only one particularly egregious type of surprise bill that had become increasingly common before the law’s enactment: When patients unknowingly got out-of-network care at an in-network facility, or when they had no choice but to get out-of-network care in an emergency. In either case, before President Donald Trump signed the law late in his first term, patients could be hit with tens or hundreds of thousands of dollars in out-of-network bills that their insurance wouldn’t pay.
The No Surprises Act also provided some protection from above-estimate bills, but at the moment, the protection is only for uninsured and self-pay patients, so it wouldn’t apply in Chen’s case since she was using health insurance.
Uninsured and self-pay patients can ask for a good faith estimate ahead of time and can dispute the bill if it is more than $400. A similar provision for insured patients asking about their cost sharing has been stalled because the government has not yet issued its Final Rule.
I have always maintained that no bill should be collectible without mutual assent. This is what my business law classes referred to as a meeting of the minds. Law professor Barak Richman believes that most surprise medical bills could be challenged under current contract law. That, however, is expensive, time-consuming, and often futile. A Colorado woman got a $229,000 surprised bill after she was quoted an estimate of around $1,700. She initially won before a jury in district court only to have the case appealed and the verdict thrown out by an appeals court. The Colorado Supreme Court later agreed with her. I wonder how much her legal fees added up to.
The No Surprises Act is just the start of what needs to be done. The following is from a Yale economist who has researched surprised bills extensively:
“There are many billing problems out there that are surprising but are not technically surprise bills,” Zack Cooper, an associate professor of economics at Yale University, told me. The No Surprises Act fixed a specific kind of charge, he said, “and that’s great. But, of course, we need to address others.”
Surprise medical bill stem from the lack of transparency. The reason there is no transparency is because doctors and hospitals do not compete for patients based on price. Moreover, it is virtually impossible to compare prices when nobody will tell you their price until they perform the service and then expect to be paid. Part of the reason it is difficult to ascertain prices in advance is because hospitals disaggregate medical procedures into 10,000 billable tasks to bill for each. However, if hospitals could not collect on disputed bills without proof of an estimate in advance, all hospitals would figure out a way. Business practices that are common in health care would not be tolerated in most other industries.
Read more at: Surprise Medical Bills Were Supposed To Be a Thing of the Past. Surprise — They’re Not.