The New Year Sees an End to Surprise Medical Bills

As Americans welcomed 2022, they had extra reason to celebrate as the No Surprises Act (NSA) became effective at one minute past midnight on January 1st, 2022. While the enactment of the NSA saw substantially less fanfare than the ball drop in Times Square, the new law represents a real win for American patients who face the prospect of unaffordable and unexpected medical bills.

Commenting on the enactment of the NSA, Rep. Frank Pallone (D-NJ), chair of the House Committee on Energy and Commerce, stated “the No Surprises Act is a huge victory for consumers who will now have the peace of mind knowing they will be protected from surprise medical bills going forward.”

The NSA passed Congress as part of the $2.3 billion COVID-19 relief bill, the Consolidated Appropriations Act of 2021, in December 2020. The bill was designed to prevent “patients from receiving surprise medical bills resulting from gaps in coverage for emergency services and certain services provided by out-of-network clinicians at in-network facilities, including by air ambulances.” 

Specifically, the NSA required health plans to “cover out of network claims and apply in-network cost-sharing” plans for emergency care and prohibited “doctors, hospitals, and other covered providers from billing patients more than in-network cost-sharing amount for surprise medical bills.”

Following the passage of the NSA, the Department of Health and Human Services (DHHS) and Center for Medicare & Medicaid Services issued two new rules that would support the implementation of the new law. These new rules banned surprise bills for emergency and non-emergency care and prohibited in-network facilities from charging out-of-network prices for ancillary care.

Surprise medical bills are a unique feature of American health care and occur “when insured consumers inadvertently receive care from out-of-network hospitals, doctors, or other providers they did not choose.” For example, a patient may have received hip surgery from an in-network surgeon and would be charged the discounted rate, but also received care from an out-of-network anesthesiologist who would charge the full rate.

The Kaiser Family Foundation (KFF) estimates that “this happens in about 1 in 5 emergency room visits” and “between 9% and 16% of in-network hospitalizations for non-emergency care include surprise bills from out-of-network providers whom the patient did not choose.”

A recent report from DHHS found that surprise medical bills “averaged more than $1,200 for anesthesia, $2,600 for surgical assistants, and $750 for childbirth.”

A 2019 survey conducted by KFF found that 56% of Americans believed that protecting patients from surprise medical bills should be a priority for Congress, while 26% said it is an important issue.

The passage of the NSA should satisfy the majority of Americans who recognized the significant problem surprise bills present to patients.

With the threat of surprise medical bills rescinding, the number of Americans facing medical bankruptcy should fall. While the exact number of medical bankruptcies is unknown, KFF has estimated that 1 million adults declared bankruptcy because of medical bills, and a further 26% of Americans struggled to pay their medical bills. Much of these bankruptcies occurred because patients were victims of surprise medical bills.

The consequences of bankruptcy for consumers can be considerable. Aside from the damaging stigma associated with bankruptcy, those who declare bankruptcy face a significant decline in their credit score, limiting access to credit cards and loans, as well as the prospect of losing their homes and life savings. 

Surprise medical bills also discourage Americans from receiving medical care. A recent study by KFF found that “half of U.S. adults say they put off or skipped some sort of health care or dental care in the past year because of the cost.” While the NSA will not resolve high healthcare costs, it should ensure Americans can receive emergency care at lower costs, encouraging them to receive care when it is needed, not when it is too late.

Delaying medical treatment is particularly dangerous because it leads to poorer health outcomes. This is because delaying medical care means “small problems can quickly progress,” making them more complex and harder to treat. Additionally, treating more complex medical conditions is far more expensive than treating simple conditions identified earlier. Avoiding medical treatment, therefore, not only leaves patients facing worse health outcomes, but it might also leave them paying more in the long run. While the No Surprises Act is not a silver bullet that will resolve all of the issues in America’s healthcare system, it certainly is a step in the right direction. As a result of the No Surprises Act, American patients can seek medical treatment knowing they will not face any surprises.

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