What you should know about the new law preventing surprise medical bills – NJ.com

When her teenage son suffered extensive injuries to his mouth during a hockey game, Judy Benedict said her first concern was making sure he received the emergency surgery he needed to save his loose teeth.

Benedict also called her insurance carrier right away, fearing his care might not be covered by their family plan.

“I am a rule-follower by nature and I wanted to make sure I was doing everything (right) on my side,” said Benedict, an auditor from Middletown.

Turns out, Benedict was right to worry. With no oral surgeon on duty at the hospital emergency room that day, an ambulance transported her 15-year-old son to another hospital, where the only doctor who could help was not in her plan’s network of providers. She said she spent hundreds of hours over the next nine months demanding the $20,000 in denied claims be paid.

Benedict said her tenacity paid off and insurance covered just about everything. But recalling the ordeal six years later brought back vivid memories of feeling “victimized.”

“I should not have been stuck in the middle of that process. I had no control. I understand if you are choosing to get some surgery done and you go out-of-network and it’s a choice you have made. But in an emergency, you are not given options. You are given one choice,” she said.

Had the same accident occurred today, Benedict would be spared that ordeal. A federal law known as the “No Surprises Act” took effect on Jan. 1, and should prevent consumers from being caught in the middle of disputes over out-of-network care. The law created an arbitration system that considers financial offers from both sides — out-of-network doctors and hospitals versus the insurance carrier — among other factors, and determines reimbursement without involving the patient.

“I wish it had been around then,” Benedict said of the new law. “It would have saved a lot of stress.”

The law is a major victory for consumers, said Patricia Kelmar, the health care campaigns director for U.S. PIRG, the federation of state Public Interest Research Groups across the country, including New Jersey, which lobbied for the passage of the law.

“Insured Americans will finally be able to focus on getting the care they need without wondering if they’ll be hit with an outrageous out-of-network bill from a provider they didn’t choose,” Kelmar said.

Consumers should familiarize themselves with the law and its expectations on health plans, doctors and hospitals, Kelmar said. “The best way to protect ourselves from illegal charges will be to know our rights,” she said.

Here’s what you need to know, based on information from the U.S. Centers for Medicare and Medicaid Services, U.S. PIRG, the American Hospital Association and New Jersey Hospital Association:

Q: Why was the No Surprises Act needed?

A: More than half of all privately-insured consumers in the nation have received an out-of-network bill for care they did not anticipate, according to a 2021 analysis of the new law by the U.S. Office of Health Policy. A Rutgers poll found one in seven New Jersey residents had received a surprise bill.

This typically happens when patients who use an in-network hospital are not informed that a physician or another provider treating them is outside of their insurance network. Many doctors — particularly specialists — have left insurance networks because they say reimbursement rates are inadequate. Surprise bills averaged $1,200 for anesthesia, $2,600 for surgery, and $750 for childbirth, according to the Health Policy analysis.

Besides protecting consumers, the law should lead to a gradual reduction in the cost of medical care.

Q: How are consumers protected under the No Surprises Act?

A: It prohibits out-of-network providers from “balance-billing.” That means billing patients who have been treated in the emergency room, and people who receive non-emergency care at in-network hospitals but have not consented to treatment by an out-of-network provider.

The law also covers air ambulance expenses, but not ground ambulance transportation.

Patients may waive these protections if they want out-of-network care by a specific doctor and sign a consent form acknowledging they will be paying more. “But they have to list for you in-network providers that could provide that service,” Kelmar said. “We are trying to get the word out to think very carefully before signing the form.”

Q: What are physicians and hospitals required to do to comply with the federal law?

A: They are required to disclosure their status as in-network or out-of-network by insurance carrier on their websites. They must give patients a document explaining their rights under the law before treatment. Signs also must be posted in waiting rooms.

Q: How does the arbitration process work?

A: Hospitals, doctors and other providers bill the insurance carrier— not the patient — for services rendered. The insurance carrier has 30 days to negotiate, but If they can’t come to an agreement, either side may file a claim for arbitration. A neutral party accepts financial offers from both sides, in what is sometimes called “baseball-style” arbitration. Providers can include information about the complexity of the procedure and the skill of the professional performing it.

But the rules also allow the arbiter to consider the in-network rate for a service “as the presumptive proper rate,” Kelmar said. “This is a really strong and important part of the federal law. We didn’t want to incentivize going to arbitration, with providers hoping they will hit the lottery.”

Both the American Medical Association (AMA) and American Hospital Association have sued to challenge this provision.

Cathy Bennett, president of the New Jersey Hospital Association, explained why this provision is harmful to hospitals.

“The out of network rate is higher than the in-network rate. This is because insurance companies often fail to adequately reimburse hospitals for the services they deliver, which leads to some insurance companies pushing providers out of network,” Bennett said. “Tying out of network payments to the in-network rate may lead to devastating financial consequences for hospitals.”

Q: Didn’t New Jersey pass an out-of-network law years ago?

A: Yes, Gov. Phil Murphy signed legislation in 2018 that outlawed surprise medical bills. But this law does not reach the majority of New Jersey residents because the state can only enact insurance laws that apply to state-regulated insurance carriers, like Horizon Blue Cross Blue Shield of New Jersey, the School Employees’ Health Benefits Program and the State Health Benefits Plan. These plans cover about only one-third of New Jerseyans.

Federally regulated, self-insured companies cover the majority of New Jersey residents who have private insurance. These plans could opt-in to the state arbitration system. But a federal law was always needed to address the problem comprehensively.

New Jersey’s law does not contain the provision in the federal that the arbiters should consider the in-network rate. As a result, according to researchers, costs have not been dramatically lowered and doctors and hospitals win 59% of the time.

Q: What should I do if I believe I have received a bill in violation of the law?

A: Contact both the provider and your insurer first. If you can’t work it out and continue to receive bills, you may file a complaint at https://www.cms.gov/nosurprises or call 1-800-985-3059 within 120 days of getting the first bill.

If you are covered by the state’s surprise billing law, contact the state Department of Banking and Insurance online or call the Consumer Hotline 1-800-446-7467.

Q: Does the law apply to facilities other than hospitals?

A: The law also applies to ambulatory surgery centers. It does not apply to birthing centers, clinics, hospice, addiction treatment facilities, nursing homes or urgent care centers that are not licensed to provide emergency care.

Q: What if I don’t have insurance?

A: The rules say you are entitled to get a “good faith estimate” of how much your care will cost before you get it.

Q: Does the law apply to people on Medicare or Medicaid, or gets their coverage through the Veterans Affairs?

A: No. These programs already have protections against high medical bills.

More information about the law may be found at https://www.cms.gov/nosurprises/Ending-Surprise-Medical-Bills and https://uspirg.org/reports/usp/surprise-medical-bill-protections-patient-tips-guide.

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Susan K. Livio may be reached at slivio@njadvancemedia.com. Follow her on Twitter @SusanKLivio.