What Is “Surprise Billing,” and What Does the No Surprises Act Do?

Today I would like to give some specific examples of what a “surprise bill” is. 

Say a patient, John, schedules a knees replacement. He looks on the website that has the list of participating providers. He makes sure the surgeon is in his insurance plan. But what John does not know is that the anesthesiologist and the radiologist are not in his insurance plan. 

Three weeks go by, and John gets an “explanation of benefits,” or EOB, from his insurance company. He is shocked when he sees that two costly items are marked “OON.” Even more shocking is that now he apparently owes almost $2,000 in “member liability.”

He calls his insurance company and is told that “OON” stands for “out of network.” He is confused, because the hospital was listed as a participating hospital and the surgeon was also listed as a participating physician. How could John know that the anesthesiologist involved in the surgery and the radiologist who read his X-rays were not? He never even met them. 

The No Surprises Act protects people covered under group and individual health plans from receiving “surprise” medical bills when they receive most emergency services, non-emergency services from out-of-network providers at in-network facilities, and services from out-of-network air ambulance service providers.

Here is what it does not do. If John had no insurance, the No Surprises Act would only allow John to request a “good faith” estimate of the cost of the procedure. Not much comfort, even if he does ask.

I think it also highlights the out-of-control relationship hospitals and providers have with the charges for services. The cost of most services in healthcare is usually around only 30 percent of the amount charged. When hospitals and providers get the full charges for their services, it is a huge windfall to them. Let’s get down to the heart of the issue. In lending, we have “usury” laws. You can only charge a certain interest rate (unless you are Tony Soprano). Let’s implement similar laws in healthcare, limiting charges to a percentage of cost or some market value.