New state law targets surprise medical bills

What: A Massachusetts consumer-protection law that went into effect Jan.1 targets balance billing – or surprise billing – when insured patients receive unanticipated charges because they unknowingly accepted services from a provider who does not accept their insurance.

"When a patient receives care from an out-of-network provider, the insurer may pay nothing, the full list price (or charge amount), or some amount in between," the Massachusetts Health Policy Commission reported in "Out-of-Network Billing in Massachusetts: A Chartpack Featuring Expanded Data, Analyses, and Insights" published in May 2020. "As a result, the patient may be required to pay the remaining balance to the provider directly."

In "A Pandemic Silver Lining: Health Care Reform in Massachusetts," Boston University School of Law's Megha Mathur writes balance billing practic-es normally play out in the following ways:

The insured patient receives care from an out-of-network provider in an emergency situation where the patient has no capacity to select the care.

The insured patient receives pre-planned care from an in-network facility, but the services are provided by an out-of-network provider.

A federal law effective Jan.1 outlaws balance-billing practices for certain emergency services rendered in hospitals and medical offices that participate in patients' insurance plans.

Patients may be admitted to the emergency room of a hospital that partakes in their insurance plan, but when they are there, the patient sometimes receives medical services from an emergency-room doctor who does not participate. That doctor, under the new federal law, cannot bill the patient for their health care services.

The new state law addresses balance-billing in non-emergency scenarios. The state law complements the federal one, but it merely stipulates that a health care provider divulge whether they partake in their patient's insurance plan a week before carrying out a non-emergency procedure.

According to Mathur, the state law also mandates the following:

Providers to disclose if they are out-of-network prior to the patient's admission.

Providers, upon request, to share the amount that the patient will be charged for admission, a procedure, or a service, including costs for services done by an out-of-network provide.

Providers to notify patients if the patient is being referred to an out-of-network provider

Prohibits providers from billing insured patients in excess of the typical, applicable coinsurance, co-payment, or deductible that would have been charged if services were provided by an in-network provider

Noncompliance with the state law comes with a $2,500 penalty per violation.

"To date, at the state level, 27 states have passed consumer protection laws against surprise medical bills," Mathur writes. "In 2020, five additional states have passed and will enact or have enacted surprise billing legislation."

Why: The Massachusetts Health Policy Commission analyzed data from 2014 to 2020 that showed surprise billing in the Bay State has gotten worse: "The financial consequences of which can be significant," the commission writes. "Surprise bills may account for some portion of the 17% of individuals in Massachusetts that currently have medical debt."

Who: Health care providers, facilities, insurance companies, patients