Surprise medical bills for out-of-network care can cost tens of thousands of dollars. But a new law, more than a year in the making, is set to go into effect on Jan. 1 that aims to prevent those high bills.

The law, the No Surprises Act, requires providers and insurers to determine how much the doctors or hospitals should be paid. That would happen first through negotiation, and then, if they can't agree, arbitration.

However, there is still some debate over how the law will be implemented.

"Patients should not be in between the provider, the doctor or the insurance company as they wrangle through who needs to pay for this," said Dr. Donald Lloyd-Jones, the president of the American Heart Association. "If it was unexpected care that the patient received from out of network, then the patient should not be in the middle of that dispute between the doctor and the insurer."

Lloyd-Jones says he's focused on making sure the law protects patients first, not the bottom line of the providers or insurance companies.

"I think the most important aspect of this act is the independent dispute review commission, and that's really a non-interested third party that's going to adjudicate the dispute, or do a judgment of the dispute between the provider and the insurance company," Lloyd-Jones said. "And that doesn't involve the patient, right? Because the patient didn't know that they were receiving this care that was out of network at the time."

The American Medical Association and the American Hospital Association filed a lawsuit against the federal government, claiming the arbitration process favors health insurers. The lawsuit argues that regulation will push insurers to seek lower payments through arbitration.

The Congressional Budget Office said the law would likely lower payments to doctors who work in specialties where surprise billing is widespread.

Walking into an emergency room near her home in Houston, Texas, Laurie Delgatto-Whitten knew the COVID-19 test she was there for would be far from pleasant, but little did she know the surprise bill she'd receive in the mail weeks later would prove to be almost as painful.

"It was a just a quick swab; it lasted maybe two minutes and that was it," she recalled.

Delgatto-Whitten got her COVID-19 test on May 18 and eventually received her negative test results about 10 days later. Then, in early June, she got a statement in the mail from her insurance company. Her bill totaled $3,165.92.

"I mean, I think it’s a total scam and in the midst of a pandemic, it’s even worse," she added.

However, under the CARES Act passed by Congress, COVID-19 tests are legally mandated to be covered. Over the past few months, though, some Americans have discovered flaws in the legislation. Because Delgatto-Whitten had already met her deductible, she personally didn't owe any money. But it's the principle of her insurance company agreeing to pay that astronomical bill that causes her deep concern.

"In the long run any cost insurance companies are taking on, they’re going to pass onto you. They’re going to be passed on to me," she said.

Healthcare advocate Michelle Johnson is concerned stories like Delgatto-Whitten’s will deter other Americans from getting tested at a time with the virus is still spreading rapidly across the country.

"If people think it’s going to cost money to go get a test they just won’t do it," Johnson said.

Johnson's advice is to request an itemized bill for any COVID-19 related procedures you might undergo. Aside from contacting your insurance company Johnson says to call your elected officials and let them know what's happening.

"The only solution is for elected officials to step up and do their job," she added.

WASHINGTON —

The Biden administration on Thursday put final touches on consumer protections against so-called "surprise" medical bills. The ban on charges that hit insured patients at some of life's most vulnerable moments will take effect Jan. 1.

Patients will no longer have to worry about getting a huge bill following a medical crisis if the closest hospital emergency room happened to have been outside their insurance plan's provider network. They'll also be protected from unexpected charges if an out-of-network clinician takes part in a surgery or procedure conducted at an in-network hospital.

The rules released Thursday detail a key part of the new system: a behind-the-scenes dispute resolution process that hospitals, doctors and insurers will use to haggle over fees. When an insurer and a service provider disagree over fair payment, either side can initiate a 30-day negotiation process. If they still can't come to an agreement, they can take the matter to an independent arbitrator.

There's also a new way for uninsured people and certain patients who pay their own way to get an estimate of charges following an emergency procedure.

"We're hoping to give folks a sigh of relief, who have been blindsided by billing," said Health and Human Services Secretary Xavier Becerra.

Surprise medical bills have been a common problem for people with health insurance, all the more irritating because most patients might have thought they were protected. Charges running from hundreds to tens of thousands of dollars came from doctors and hospitals outside the network of patients' health insurance plans. It's estimated that about 1 in 5 emergency visits and 1 in 6 inpatient admissions triggered a surprise bill.

Although many states already have curbs on surprise billing, federal action was needed to protect patients covered by large employer plans, which are regulated at the national level. A 2020 law signed by then-President Donald Trump laid out a bipartisan strategy for resolving the issue, and the Biden administration filled in critical details.

The idea was to take patients and their families out of the financial equation by limiting what they can be billed for out-of-network services to a fee that's based on in-network charges. That amount gets counted toward their in-network annual deductible.

The new protections are aimed at:

• Protecting patients from surprise bills arising from emergency medical care. Protections apply if the patient is seen at an out-of-network facility, or if they are treated by an out-of-network clinician at an in-network hospital. In either case, the patient can only be billed based on their plan's in-network rate.
• Protecting patients admitted to an in-network hospital for a planned procedure when an out-of-network clinician gets involved and submits a bill.
• Requiring out-of-network service providers to give patients 72-hour notice of their estimated charges. Patients would have to agree to receive out-of-network care for the hospital or doctor to then bill them.

Before the ban on surprise billing, patients usually had to take the initiative themselves to work out unexpected charges. In many cases the hospital or doctor would go back and forth with the insurance company until they reached an agreement. But there was no guarantee that would happen, and patients were at risk of being placed into collection proceedings in situations they had no control over.