Hospital price transparency rule takes effect to reduce surprise medical bills

A new law requires private health insurers to cover surprise bills at rates within the network based on the median cost of care for similar services. (iStock)

On January 1st, a surprise new billing law came into effect aimed at improving patient protection and reducing out-of-pocket expenses.

The No Surprises Act requires private health insurers to cover surprise bills at in-network rates, prevents off-network providers from overcharging patients, and prohibits residual billing for emergency and non-emergency services in certain circumstances. These safeguards already applied to patients on Medicaid and Medicare.

“Nobody should have to worry about going bankrupt after falling ill or using an intensive care unit.”

– DHHS Secretary Xavier Becerra

A recent Department of Health (HHS) report found that surprise medical bills are common among patients with private health insurance. They can spend an average of more than $1,200 on off-network anesthesiology services, $2,600 on surgical assistants, and $750 on obstetric-related supplies.

While the new hospital billing rule provides protection for patients in many circumstances, there are still coverage gaps that can result in higher than expected patient medical bills for some types of providers. Read on to learn more about the No Surprises Act and how to manage surprise medical bills. On Credible you can compare a wide range of financial products, e.g. B. Debt Consolidation Loans.

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What patients should know about the No Surprises Act

The No Surprises Act bans most unexpected medical expenses for patients receiving emergency care or scheduled treatment from healthcare facilities that are not in their insurance network – and that they did not choose. Example: A woman giving birth may have chosen a doctor within the network but is being treated by an anesthesiologist outside the network, resulting in a surprising bill.

In these cases, consumers must pay for the intra-network cost sharing based on the average intra-network payment amount under the plan for similar services. But there are exceptions to the rule, which patients should be aware of, according to Bill Kampine, co-founder of Healthcare Bluebook, a price transparency tool.

“The only thing to note is that the new requirement applies to hospitals, inpatients, outpatient facilities, outpatient surgeries and independent emergency departments,” Kampine said. “It doesn’t apply specifically to emergency care centers or care in a clinic.”

The legislation also requires off-grid providers to tell you they’re off-grid and provide a good faith estimate up front, Kampine said. If you want If you use this provider, you must give your written consent so that they can settle the bill for you.

“Once they signed that consent, they essentially waived their right to that protection,” Kampine said. “Consumers should be very careful and very aware before agreeing to this and do their homework and use the transparency tools at their disposal.”

One way to prepare for unexpected hospital bills is to build a solid emergency fund that will cover about 3 to 6 months of expenses. This can help consumers avoid high-interest credit card debt to pay for unexpected expenses, including medical bills. You can invest your emergency fund in a high-yield savings account that allows your savings to grow over time through interest. Compare interest rates for high-yield savings accounts for free without affecting your credit score on Credible.

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3 ways to manage unexpected medical bills

Unexpected medical bills are a problem for about two-thirds of American adults, according to the Kaiser Family Foundation (KFF). About 1 in 5 ER visits and 1 in 6 on-network hospitalizations result in at least one off-network charge, the KFF reports.

If you got an unexpected medical bill, consider these strategies to manage the balance and pay off your debt:

  1. Know your rights under federal law
  2. Negotiate with your healthcare provider
  3. Find ways to pay off medical debt

Read more about each tip in the sections below.

1. Know your rights under federal law

The No Surprises Act isn’t the only federal government law aimed at protecting patients from unaffordable medical bills. Federal law requires nonprofit hospitals to offer financial assistance to low-income patients, according to the National Consumer Law Center (NCLC), though those rules are implemented at the state level.

Check the laws in your state to determine if you are eligible for discounted care or interest-free payment plans based on your household income. Keep in mind that this only applies to not-for-profit hospitals, so these laws do not apply to select types of care provided at independent medical centers such as dental offices or dermatologist offices.

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2. Negotiate with your healthcare provider

Depending on your healthcare provider and the type of care you received, it may be possible to negotiate a lower payment amount or enroll in an interest-free payment plan. A 2018 Consumer Reports study found that more than half of patients who attempted to negotiate a medical bill were successful.

  • Ask your insurance company for a Statement of Benefits (EOB) and a Statement of Benefits and Coverage (SBC) to determine if a benefit should be covered.
  • Check your invoice for errors such as B. incorrect coding or double billing. According to Kaiser Health News (KHN), some proponents of medical bills believe that up to 80% of medical bills contain errors.
  • Contact the healthcare provider’s billing office. You may be eligible for a discount on your bill if you can pay everything at once instead of signing up for a payment plan.

You should also do your research if you want to negotiate a medical bill. Use a cost comparison tool like Healthcare Bluebook to estimate the average cost of care for medical services in your area.

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3. Find ways to pay off medical debt

Medical debt is the leading cause of bankruptcies, according to the NCLC, meaning many patients are unable to reduce care costs through negotiations or payment plans. Unpaid medical bills can result in garnished wages and a negative impact on credit scores, so finding ways to avoid late payments is important.

If you’re struggling with overwhelming medical bills, you should speak to a credit counselor. Nonprofit credit agencies help debtors with free or low-cost debt management services and may be able to help you sign up for a debt management plan (DMP) to pay off your debt on fair terms without hurting your credit score. A credit officer may also be able to work with creditors, such as creditors, on your behalf. B. medical providers, negotiate.

Select patients can also benefit from using a debt consolidation loan to keep their medical bills out of collections. Note that these loans have interest that contributes to the overall cost of paying off medical debt. With interest rates on this type of loan now near all-time lows, borrowers with good credit ratings may qualify for favorable terms.

You can compare debt consolidation loan interest rates from multiple lenders without affecting your credit score with Credible, so you can decide if this option is right for you.

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