Surprise billing is when out-of-network care is unwittingly used when someone is getting care. This most often happens in emergency situations where many providers are needed and care can’t be coordinated as well beforehand.
Surprise billing has historically led to accidental spending by individuals and families, especially in emergency situations. The issue is that surprise billing can lead to unpayable high medical bills and then lead to bankruptcy despite individuals and families having insurance due to the way networks work.
The new measure, which takes effect in 2022, makes it so providers and insurers will have to settle the bills between themselves or use an arbitrator. Using an arbitrator was offered as an alternative to using set benchmark reimbursement rates (something insurers and providers didn’t favor).
NOTE: The measure is now set to become official now that the stimulus package was passed. For more, see insight from Prof. Fiona Scott Morton, whose research helped bring the practice of surprise billing to light.
FACT: A 2012 Health Services Research survey found that 8% of privately insured individuals had used out-of-network care in 2011 and 40% of those claims involved surprise out-of-network claims.
FACT: According to the NewYorkTimes, “The average surprise charge for an emergency room visit is just above $600, but patients have received bills larger than $100,000 from out-of-network providers they did not select.”
- Surprise Medical Bills Cost Americans Millions. Congress Is Finally Set to Ban Most of Them. NyTimes.com.