Good journalism helped drive change on surprise bills — but these loopholes in the law deserve scrutiny

January 1 marked a milestone — the implementation of the first major consumer protection law since the Affordable Care Act took effect nearly a decade ago. Consumer legislation doesn’t come easily in this era of super-slick corporate lobbying and a lack of interest in consumer affairs by politicians, so it’s something of a celebration that the new law even passed. The law takes the patient out of potential disputes between a health care provider — a doctor or a hospital, for example — and the patient over whether the patient is obligated to pay any so-called surprise bills. Those are the unexpected charges above what the patient’s insurer is expected to pay when they use in-network providers. The new law prohibits doctors, hospitals, and other health care providers from requiring patients to pay those additional amounts and sets up an arbitration process for medical practitioners to duke it out with insurers and others who pay the bills.

In many ways, the law is also a victory for the media since it was their sustained coverage that spurred public outrage. In particular, I would say it was the product of a continued focus on surprise medical bills by Sarah Kliff, now at The New York Times but who started collecting such outrageous bills when she was at Vox, and Kaiser Health News and NPR, whose joint bill of the month series beginning in 2018 kept the focus on this insidious practice. Many other outlets, too, focused on the unsavory practices of air ambulances, especially in rural areas, where they picked up injured patients and left their loved ones like Kathryn Green in Mississippi with enormous bills they could not pay.

“The coverage was a good example of persistent reporting and of what Eric Eyre, now an investigative reporter for the Mountain State Spotlight, has called ‘sustained outrage’ about powerful institutions and holding them to account,” says Reuters reporter Chad Terhune, who wrote one of the early pieces about the practice for Kaiser Health News. “As health reporters, we often think that something has been covered or is old news, but this issue deserved all the coverage it got because it affected so many and really exposed the predatory business practices in the system in a way readers and policymakers could understand.”

What the law does — and doesn’t do

First off, the new law does not offer protection to the 31 million Americans who are currently uninsured. “It’s a significant hole in the law,” said Shawn Gremminger, director of health policy at the Purchaser Business Group on Health (formerly known as the Pacific Business Group on Health). The law does say, however, that uninsured patients and those who choose not to use their insurance for their care are entitled to a good faith estimate of potential charges in non-emergency situations. If the bill is at least $400, a patient can dispute the charge to the Department of Health and Human Services.

Insured patients have more protections, although there are significant loopholes. Patients who now experience a medical emergency and receive care in hospital emergency rooms, freestanding emergency rooms, hospital outpatient departments, ambulatory surgical centers, and air ambulances cannot be billed for more than the amount of what their in-network share of cost would be. Medical personnel who treat them, such as emergency room physicians, anesthesiologists, radiologists, and assistant surgeons who commonly are out of a facility’s network, must now also accept the in-network payment as payment in full and cannot charge a patient more. The medical practitioners and insurers then negotiate over any out-of-network charge. If they can’t agree, the matter goes to arbitration where an arbitrator decides who gets what amount. 

Patients, though, must still pay their required premiums and deductibles, which their employers’ insurance plan or their individual coverage require. Those amounts have been rising steadily in the last several years, now exceeding on average on average 10% of the median income in 37 states in 2020, according to a just-released study.

While the “no surprises” law undoubtedly will help millions of patients, the forceful lobbying clout of its opponents has resulted in legislative compromises that will hurt many patients as the law becomes widely used. Perhaps the most glaring hole is that the billing protections relating to ambulance services apply only to care given in air ambulances, not to services provided by ground ambulances, which consumers might need if they are injured in a car accident or are having a stroke. Last year a study in the journal Health Affairs reported that patients who end up using both ground and air ambulances for transport to medical facilities received out-of-network charges that were substantially higher than in-network prices. In fact, 71% of all ambulance rides involved potential surprise bills. Out-of-network air ambulance bills were larger, but out-of-network ground ambulance bills were more common. The median potential surprise bill for ground ambulance rides was $450; for air ambulances it was $21,698. Bottom line: sick patients are still exposed to significant financial risk from ground ambulances.

Another big loophole could influence how much protection patients will actually get.  The law allows patients to sign away their right to pay only the in-network fees charged by providers. Some health care providers can give patients a consent form, which if they sign, obligates them to pay whatever the out-of-network physician’s charges are. As we know from all the reporting on this topic, those charges can be very high. Consent forms must be given at least 72 hours in advance of a procedure. If a service is scheduled for the same day, the consent must be given at least three hours in advance of the procedure. Although the patient must sign the form, the provider is not required to do the same. Consent, however, can be revoked before the service is given.

“It has been almost shocking to me how difficult it has been to pass this law. I thought it was going to be a slam dunk.” —  Shawn Gremminger, Purchaser Business Group on Health

Federal regulators say that the use of waivers should be limited, and there’s a list of services for which they can’t be used. That list includes emergency care; diagnostic services including radiology and lab services; and services provided by assistant surgeons, hospitalists, and intensivists. Karen Pollitz, a senior fellow at the Kaiser Family Foundation, points out in a useful document that the regulation estimates “consumers will give consent to waive protections in 50% of post-stabilization claims and for 95% of non-emergency services provided at in-network facilities.”  Furthermore, the regulations don’t require data reporting on such waivers to regulators, so we’re likely to be in the dark about the numbers of people who are actually signing such consent forms and for what services and providers. 

Bu why would someone sign such a waiver in the first place? There may be urgent medical needs and an in-network doctor is not available, explained Jack Hoadley, research professor emeritus at Georgetown’s Center for Health Insurance Reforms. For example, he said, “Your regular OB is out of town and the baby is coming early and there might not be time to find an in-network provider.” Or perhaps there’s a complication. Hoadley added, “We’re going to have to work out these situations. The goal of the law is to be self-enforcing. Yes, there are loopholes, but the law should prevent most of these situations from happening.”

While patients may be off the hook for paying these surprise bills, disputes between health care providers and insurance companies will surely continue because so much money is at stake. Writing recently on the Health Affairs blog, Katie Keith, a research faculty member at Georgetown’s Center, noted “private equity firms have historically used surprise billing as a business model to maximize revenue.” That suggests it’s unrealistic to expect that those firms, which increasingly own medical practices, won’t fight to keep their proverbial gravy train on track. As Keith wrote, the law’s implementation “could help lower health spending or inadvertently raise premiums.”

“It has been almost shocking to me how difficult it has been to pass this law. I thought it was going to be a slam dunk,” Gremminger said. But as the Affordable Care Act and all its legal challenges over the past decade have shown, consumer legislation is not home free even it passes. Given the five legal challenges to the balance billing law or its implementation from groups like the Texas Medical Association, the American Medical Association, and the Association of Air Medical Services — mostly challenging the law’s methods for determining monetary settlements  — it would not be surprising if a betting woman chose Keith’s gloomier scenario of higher premiums. 

The law’s authors originally intended for the arbitrator to use the median in-network rate for the services in question when insurers and medical providers could not agree. But as Gremminger points out, final changes to the law now allow arbitrators to consider other factors, such as doctors’ training and the kind of facility where services are given. Equally important, the law prohibits arbitrators from considering rates paid by Medicare and Medicaid, which are lower than rates paid to commercial carriers. These changes could further raise medical costs in a health system already the most expensive among peer countries.

Covering implementation of the law will be much more complicated and potentially wonkier than reporting on the outrageous examples of surprise bills. It will require a deep understanding of the law, and its enforcement will rely on a lot of self-policing on the part of patients. As I know from my own experience, relying on patients to police the health care system is pretty darn difficult, if not impossible. The new billing protections are not straightforward. And reporters tasked with following the law must keep a keen eye on the potential for more health care inflation if the lawsuits underway across the country are decided in ways that give providers a chance to charge higher fees. In states like New York, New Jersey, and Texas that have passed their own balance billing laws, research suggests that the laws may contribute to significant price increases for in- and out-of-network services. Gremminger says his group’s members pay the medical bills on behalf of their employees and that such changes could add more insurance costs for their workers.

Patients themselves will need lots of help navigating and enforcing the new protections. To that end, Axios is taking a page from those earlier efforts by Sarah Kliff and others and beginning a new series called “Billed and Confused,” inviting the public to share their experiences with medical bills and the new law. Axios’ health reporter, Bob Herman, told me the project is “good public service journalism. We are focusing on billing headaches that drive people nuts and the policies behind them.” 

Veteran health care journalist Trudy Lieberman is a contributing editor at the Center for Health Journalism Digital and a regular contributor to the Remaking Health Care column.