“Surprise bills” in US hospitals are about to disappear

NY The “surprise bills” that cost millions of dollars to patients in US hospitals every year are ultimately doomed to disappear thanks to new legislation that will come into effect in 2022.

Hidden in the immense stimulus package approved in Washington to close the year, the law aims to end a practice hated by almost everyone but which took years to be halted due to the multimillion dollar lobbying activity of companies. who benefit from it.

The so-called “surprise bills” are usually given when a patient goes to a hospital that is within the network covered by their insurance, but is treated by a doctor or other professional not within that network.

That doctor bills his services separately and at a higher price – because he has no contract with the insurer – and if the insurance refuses to reimburse them – because they are exorbitant prices – the reimbursement is borne by the patient.

According to several studies, the situation occurs 20% of the times when an American visits the emergency rooms of a hospital, where he clearly cannot choose which doctor is treating him or to find out in advance what cost to deal with.

These types of situations are also common with hospital transfers, with ambulances not part of the network covered by the insurer, although the medical center is.

“It’s awful,” said Fiona Scott Morton, an economics professor at Yale University who has been researching the problem for the past few years.

Inflated prices

The average “surprise bill” is a little over $ 600, but it often happens to be thousands of dollars or even more than $ 100,000.

“These prices are often three times higher than normal”explains Scott Morton, who insists that in the absence of an agreement with the insurers, the doctor can “charge literally any price he wants.

The phenomenon of “surprise bills” has exploded in recent years, with staffing firms making it their business model and piquing the interest of investment firms.

The tactic of these companies is to hire doctors who work in the emergency room and take them out of the agreements between the hospital and the insurers so they can charge higher prices.

“It is a deception tactic that is clearly hurting the consumer and driving up healthcare costs”Scott Morton says.

However, with millions invested in this company, several private equity firms have spent large sums of money in recent years to avoid the regulation of a way of doing business that has been strongly criticized by insurers and users.

The unpopularity of these practices was made clear by the bipartisan support for the law banning them in a severely broken US legislature.

A solution, but not complete

Starting next year, when medical providers and insurance companies cannot agree on a price, they will have to use an arbitration system to set a “reasonable” amount based in part on the cost of similar services.

Thus, patients will be protected from these “surprise bills” and will have to pay at most the payments required by their insurance plan for treatments within their network.

The arbitration mechanism that was ultimately decided is in part the result of the industry’s “lobbying” efforts, which managed to avoid a total ban on the practice or other formulas, such as predetermined prices.

According to some analysts, the COVID-19 crisis has helped those interests, as lawmakers are reluctant to stop anything that would benefit many doctors in the midst of a pandemic.

The new law also excludes ambulances, which are responsible for a significant number of “surprise bills,” although it bans the practice in the case of air transport, which generates some of the highest fees.

In an almost symbolic case of this problem, a sick woman with COVID-19 found herself on a bill for more than $ 52,000 last April after being transferred by helicopter from one hospital in Philadelphia to another hospital just over 20 miles away during intubation. and unconsciously.