New Legislation Seeks to Reduce Surprise Billing and Predatory Billing Practices
Sudden, surprise medical bills can threaten your financial future and haunt you for the rest of your life. This is precisely what medical insurance is meant to prevent. But the price between what medical practices bill and what insurance companies cover can derail financial expectations. What can be done to reduce catastrophic medical bills and predatory efforts to collect them?
Surprise billing
No one should have to choose between necessary medical care and financial well-being, but with rising healthcare costs, financial ruin is a real — and terrifying — possibility. This is why insurance coverage is vital for Americans — and why Americans without health insurance often forego care or make employment choices based on the availability of group health insurance. But even with insurance coverage, affordable healthcare isn’t guaranteed.
One of the first decisions you’ll make with a new health insurance plan is which provider will be your primary care physician (PCP). Unfortunately, available options aren’t determined by patient convenience or preference. The primary consideration is which providers are in your plan’s network. But being diligent about your choice of PCP is only the beginning. Auxiliary services, such as anesthesiology, radiology, or lab tests must also be in-network to qualify for plan coverage. Surprise billing gets its name from the shock patients experience when they receive their bill, but it’s defined as the cost difference between in- and out-of-network care.
Surprise billing usually coincides with emergency care where network providers and prior authorization aren’t available — or even of primary concern. When patients can’t select covered providers or services, their healthcare costs increase, and the difference is potentially astronomical. Unscrupulous providers have been known to use surprise billing as leverage for higher in-network payments. This tactic leads to higher plan premiums and out-of-pocket expenses for patients. Coupled with high deductibles, these expenses can be devastating to a patient’s long-term financial well-being.
Predatory billing practices
Predatory billing practices add insult to the injury of surprise billing and medical debt. According to World Health.net, medical billing comprises 58% of all debt collection in the United States, and it’s a frequent contributing factor in bankruptcy filings. “A new analysis by Johns Hopkins University reveals that many of the top 100 hospitals by revenue in the U.S. use predatory tactics to pursue patients with unpaid bills,” and the prices they pass on to patients can be as much as seven times their cost for providing care.
Predatory providers use lawsuits, wage garnishment, and personal property liens against patients to collect debts at inflated rates. While providers dismiss exorbitant healthcare costs as a negotiating tactic in their quest to get higher payouts from insurance companies, their predatory collection practices snowball into more financial burden for patients.
What’s being done?
In December 2020, Congress passed the No Surprises Act to address surprise medical billing at the federal level. Its provisions include hospital transparency rules requiring providers to disclose contractual allowable prices. If your health plan covers emergency services, your insurance company will be required to cover care regardless of whether the provider is in your network — or whether you’ve obtained prior authorization. The legislation also limits out-of-pocket expenses for out-of-network care. It is set to take effect in January of 2022.
Medical billing and reimbursement are complicated. With the No Surprises Act, new rules are poised to make billing even more complex. The professionals at HRG can help you sort it all out before the legislation takes effect. Contact HRG to ensure your practice remains compliant.
