An unfortunate but common feature of the U.S. health care system is surprise billing — an unexpected charge not covered by insurance even though the patient received care at a facility or from a doctor they believed to be within their insurance network. The coronavirus pandemic is creating more situations in which patients might receive care from an out-of-network provider, and state and federal policies, including some specifically aimed at COVID-19 patients, don’t adequately protect patients from receiving surprise bills. The nation should expand surprise billing protections to include all patients, now and after the coronavirus pandemic ends.
Surprise billing is a problem for both consumers' finances and their health. The average surprise bill is for $1,500, more money than many Americans have on hand. Fear of big medical bills can deter people from seeking care, harming their health and potentially the health of those around them. For example, a recent poll found that one in seven Americans would avoid seeking medical care even if they experienced classic symptoms of COVID-19 because they feared how much treatment would cost.
Fears of surprise bills aren’t unreasonable. In 2017, one in six Americans reported having received a surprise medical bill. Surprise bills are especially common for emergency room visits, with multiple studies finding that emergency care doctors have some of the highest rates of surprise billing. That’s because in many cases emergency room physicians are employed by independent staffing firms, not the hospital. Lab tests ordered during a hospital stay are also a common source of surprise bills, as are anesthesiology services.
Patients don’t have the ability to avoid most of these surprise bills. In an emergency or when sick enough to be hospitalized, patients are not in a position to query every provider about their billing practice. Nor should they have to. Surprise bills are common at in-network hospitals, meaning patients have already made an attempt to seek care that will be covered by their insurance.
COVID-19 has the potential to make surprise billing even more common. Emergency room physicians and laboratories, some of the most common sources of surprise bills, have a large role to play in the COVID-19 response (though at least one firm has said they will suspend surprise bills for COVID-19 patients). In addition, as hospitals in COVID-19 hotspots increase staffing, they may do so by turning to physician staffing firms or other physicians who don’t normally work there and thus aren’t in-network.
Solving this problem requires policy action.
Multiple states have adopted surprise billing protections for patients in recent years and also on an emergency basis in response to COVID-19, though those measures have failed to fully curb the problem. In fact, some of the states with the strongest protections, such as California, also continued to have some of the highest rates of surprise billing. (See figure below from the Health Care Cost Institute.) Some of the problem stems from the fact that state-level protections apply only to state-regulated plans, such as those sold through the Affordable Care Act exchanges and some employer-sponsored plans. State-level protections do not govern self-funded employer-sponsored plans. More than half of workers with employer-provided insurance are in self-funded plans, which are regulated by federal law.
Though there is more that many states can do, ending surprise medical bills for many privately insured patients requires federal action.
Last summer, bipartisan congressional efforts to curtail surprise billing failed after opposition from some in the health care industry. The loudest opposition came from physician staffing companies owned by private equity firms, which ran misleading ads targeting electorally vulnerable lawmakers who otherwise might have supported limits on surprise billing.
The Trump administration has adopted limited new protections to reduce surprise billing during the COVID-19 crisis. In rules regarding federal financial assistance authorized by the CARES Act, the administration prohibits any hospitals, clinics or other providers who accept emergency funds from sending a surprise bill to patients treated for known or suspected cases of COVID-19. This should reduce surprise billing to a degree, but patients remain vulnerable.
First, as in other emergency situations, it is unreasonable to expect that COVID-19 patients will have the capacity to research whether their emergency health care provider has accepted federal funding that prohibits surprise billing. While the Department of Health and Human Services has created a database that lists all the health care providers who have received funds, patients who fear they have COVID-19 are unlikely to be in any condition to search the database and select a provider based on what they learn.
In addition, even if a patient looks up a specific hospital, they have no way to learn in advance whether the emergency care physician they will see is employed by the hospital or by a physician staffing services company. (At least one physician staffing firm has accepted federal funds, according to a news report, though it does not appear in the federal database as of 5/10/20.) This leaves patients potentially exposed to one of the largest sources of surprise bills.
Moreover, the new federal protections apply only to patients with COVID-19 or who are suspected of having COVID-19, but surprise billing isn’t a problem just for COVID-19 patients. The nation needs a comprehensive solution to surprise billing that will protect all patients now and when this pandemic is over, regardless of what illness or injury they seek treatment for. Federal policymakers should establish permanent protections against surprise billing for all patients.
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