New Ways To Protect Yourself From Surprise Medical Bills

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It may have happened to you: You have a procedure at an in-network hospital and carefully choose a doctor in your insurer’s network, but you end up getting an unexpected bill for hundreds — or thousands — of dollars from an out-of-network provider who was involved, such as an anesthesiologist or radiologist. Or you go to the emergency room at an in-network hospital and receive a massive bill from an out-of-network ER doctor who works there. A study by the Kaiser Family Foundation found that 1 in 5 insured adults had an unexpected medical bill from an out-of-network provider during the past two years and that 18% of emergency room visits result in at least one surprise bill.

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About Balance Billing

Insurers don’t negotiate rates with out-of-network providers, and patients end up with surprise medical bills when the provider charges more than the insurer will pay, called “balance billing.” In many cases, you can’t control whether an out-of-network provider is involved with the care team. “If you’re really sick, you could be in the hospital for days, and anybody who walks into your room or who touches your films or your labs, any one of those professionals could be out of network,” said Karen Pollitz, senior fellow with the Kaiser Family Foundation. An American Cancer Society study of cancer patients and survivors found that most surprise bills were for over $500 and 21% totaled $3,000 or more.

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Balance billing from ground and air ambulances have also been a problem, as well as for emergency room visits — even at in-network hospitals. “It’s fairly common for some ER physicians to be out of network,” said Adam Fox, deputy director of the Colorado Consumer Health Initiative, a healthcare advocacy group.

Surprise medical bills have become more common as insurers shrink their provider networks. Several states have passed laws to protect patients from surprise medical bills, but some are more comprehensive than others, and the state laws don’t cover many people who have health insurance from large employers (self-insured employer plans aren’t covered by the state laws).

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A new federal law will protect more patients from surprise medical bills, whether they have coverage from an employer of any size or an individual policy. These provisions were included in the COVID-19 relief package that was signed into law on Dec. 27, 2020, but they won’t take effect until 2022. Here’s what you need to know about the new law, and what you can do to protect yourself until then.

How the New Law Will Work

Under the new law, providers will be prohibited from sending balance bills for out-of-network services at in-network hospitals, such as from a radiologist or anesthesiologist. Instead, you are just responsible for in-network cost sharing. “Copays are calculated as in-network and out-of-pocket limits apply as if it’s in-network,” said Jack Hoadley, research professor emeritus at Georgetown University’s McCourt School of Public Policy. The law also protects patients from surprise bills for emergency services, whether at an in-network or out-of-network facility.

The provider can negotiate to receive extra payment from the insurance company or can take the case to arbitration if they can’t agree, but the consumer is not involved. “The patient gets an explanation of benefits, and that’s it – they shouldn’t get any more bills,” Pollitz said. “At that point, it’s between the insurance company and the provider or facility. The patient is out of it.”

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The federal law also covers surprise bills from air ambulances, but not ground ambulances, and it includes other consumer protections, such as stricter requirements for insurers to keep their network directories up to date. “It also increases transparency, allowing consumers to receive an Advanced Explanation of Benefits that estimates costs and cost sharing,” said Anna Schwamlein Howard of the American Cancer Society Cancer Action Network.

“It is exciting,” said Hoadley, who has been studying surprise medical bills for more than 10 years. “There are still a lot of steps to be done in implementation, but those protections are now on their way.”

How To Protect Yourself From Surprise Medical Bills Until 2022

The federal law doesn’t take effect until 2022, but you may have some state protections until then. More than 30 states have passed laws to protect consumers from surprise medical bills, including 17 states that have comprehensive protections, Hoadley said. Some prohibit providers from sending balance bills, but others just hold the consumer harmless — which means that you need to know that you aren’t required to pay the bill you receive. Your state insurance department can explain the laws and may also help you appeal a surprise bill. Find links to your state insurance department at https://content.naic.org/state_web_map.htm.

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If you receive a surprise bill, ask your insurer and provider why you received it and ask for an itemized bill breaking down the charges. If you see that the insurer is only paying $100 and you’re billed $2,000, for example, ask your provider and your insurer what you can do, Pollitz said.

Try to avoid surprise bills ahead of time. “If you’re having a planned procedure, ask who is going to be part of your care team and whether they are all part of your insurance network,” Fox said. There’s no guarantee that another provider won’t end up getting involved, but it doesn’t hurt to ask. “Keep records of these calls,” Howard said. An advocacy organization in your state, such as the Colorado Consumer Health Initiative, may be able to help.

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About the Author

Kimberly Lankford has been a financial journalist for more than 20 years. As the “Ask Kim” columnist at Kiplinger’s Personal Finance Magazine, she received hundreds of reader questions every month about insurance, taxes, retirement planning and other personal finance issues. Her financial articles have also appeared in the Washington Post, U.S. News & World Report, AARP Magazine, Boston Globe, PBS Next Avenue, Bloomberg Wealth Manager and Military Officer Magazine, and her syndicated columns were published regularly in the Chicago Tribune, Denver Post, Baltimore Sun and other papers.

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