New federal law to stop surprise medical bills takes effect Jan. 1

ATLANTA — When a new federal law takes effect Jan. 1, patients with health insurance might finally stop getting many types of surprise medical bills.

All sides abhor surprise medical bills: bills that happen when a properly insured patient finds out too late that a member of their care team was not in their insurance plan's network.

In such cases, the patient can be stuck in the middle — and stuck with the bill. If the insurance company refuses to pay the price set by the doctor or hospital, the provider bills the patient instead.

But last year, Congress took a big step to stop the practice, passing the No Surprises Act. It adds to protections the Georgia Legislature already enacted last year, which addressed some, but not all, of the problems.

Natasha Kumar, a researcher for the nonprofit consumer group Families USA, called the new federal law "a huge win for consumers, and a really landmark piece of legislation."

"Surprise billing is a highly predatory practice that has been taking place for for many, many years," Kumar said. The federal law may stop as many as 10 million surprise bills a year, according to the Kaiser Family Foundation.

The thorny issue of price — how to decide how much the insurance company owes a doctor or hospital outside its network — is now something the Biden administration is grappling with, as it writes up the rules that establish step-by-step how the law will work. Interim rules that the administration released this fall ran into resistance.

The American Medical Association, the nation's most powerful lobbying group for doctors, in October called the interim final rule "a surprise gift to the insurance industry," arguing it will leave medical providers shortchanged. The AMA urged the White House to delay implementing it.

Some of the rules will be ready to go starting Jan. 1, the administration told The Atlanta Journal-Constitution, but some won't.

What the law does

Both Georgia's surprise billing law and the federal law attempt to take the patient out of the middle of the disputes between insurance companies and caregivers who don't have contracts. Under the new law, if a properly insured patient gets a surprise bill, they should be billed for co-pays just as if everything fell under their insurance. Then they're out of the fight.

The insurance company and the doctor or hospital can keep fighting, in an arbitration process set up by the government. If they can't work it out themselves, the arbitration authorities will decide the price that the insurance company should pay the care provider.

The federal law does something Georgia's law didn't: It applies to big employer-sponsored health plans. The federal law also took on air ambulance fees, which states found difficult because of federal involvement in regulating air ambulances.

Georgia's average medevac flight ranks as the third-longest distance in the nation, the anti-surprise billing organization FAIR Health found. During the pandemic, COVID-19 cases have become the second most frequent reason for air ambulance transport.

The federal law did not take on ground ambulance bills, though. Neither did Georgia's law.

There are varying protections in the federal law for emergency coverage and non-emergency coverage.

In emergencies, the federal law requires all hospital costs to be covered even if an anesthesiologist in the hospital, for example, was not under contract with the patient's insurance company.

But when it comes to non-emergency care, it's critical that the patient choose a facility that's in their insurance network. If the hospital or outpatient surgery center is in-network, then that out-of-network anesthesiologist would have to be covered for that visit.

A big exception though: In non-emergency visits to in-network facilities, an out-of-network doctor or provider is allowed to ask the patient for written consent to waive their protections and accept a higher bill. If the patient refuses, the provider can refuse to work.

Fighting a son's bills

The proposed protections for air ambulance bills have also drawn a lawsuit, from the Association of Air Medical Services.

Right now, medevac helicopters and planes may charge enormous prices for one ride — not just because of the cost of the flight, but to cover the cost of the vehicle and crew to wait around when there aren't any calls. They've had little incentive to tamp down their fees.

In 2020, FAIR Health found, the average charge for a medevac helicopter in the U.S. was $30,446, not including mileage. That's many times what the air companies accept from Medicare: $3,739 on average.

Jim Hopkins of Marietta, Georgia, spent a year fighting surprise medical bills for his son Joey's estate after Joey died following a hiking accident. The air ambulance alone charged more than $35,000 for the 39-mile flight: $9,516 for the mileage, plus $22,870 for making a night flight, plus other fees.

Then on the other side, Hopkins says, the insurance company at first argued the flight wasn't actually an emergency.

Hopkins is glad Congress acted.

"That's fantastic," he said. In these cases, he said, "the patient is not requesting an ambulance, it's the first responders. The patient's dying."