Surprise Medical Bills: A Problem That Won't Go Away

The Complexity of Medical Billing and the Limits of the No Surprises Act

Last year, Jessica Chen, a physician assistant from Massachusetts, faced an unexpected financial burden after undergoing a mammogram and sonogram at Lowell General Hospital-Saints Campus, part of Tufts Medicine. Before the procedures, she inquired about her out-of-pocket costs using her insurance, Tufts Health Plan. She was told that her portion would be $359, which she paid. Weeks later, however, she received a second bill for an additional $1,677.51. This left her deeply frustrated, as she had already been struggling with the initial amount.

The No Surprises Act, enacted in 2022, was designed to protect individuals covered under group and individual health plans from receiving surprise medical bills. According to the Centers for Medicare & Medicaid Services (CMS), the law aimed to address some of the most egregious practices in healthcare billing. Despite this, patients like Chen continue to face unexpected charges.

With the help of her tech-savvy partner, Chen discovered the hospital’s “machine-readable” master price list and found the negotiated rate between Lowell General and her insurer was only $302.56 — significantly lower than what she had paid. She filed a complaint with CMS, but the agency responded that the protections of the No Surprises Act did not apply in her case.

Tufts Medicine spokesperson Jeremy Lechan explained that healthcare billing is complex and involves multiple factors, leading to discrepancies between initial estimates and final charges. While the No Surprises Act has made significant strides in reducing certain types of surprise bills, it does not cover all scenarios.

The law primarily protects patients from out-of-network care at in-network facilities or emergency situations where they have no choice but to receive out-of-network care. Before the act, patients could face massive bills that their insurance didn’t cover. However, the protection is currently limited to uninsured and self-pay patients, meaning it doesn’t apply to those with health insurance.

Patients with insurance are entitled to a good-faith estimate for scheduled treatments if they request one at least three business days in advance. If a bill exceeds the estimate by more than $400, they can dispute it. However, this provision has yet to be fully implemented, as the government has not issued clear guidelines on its exact form.

Despite these efforts, many Americans still face shocking and unanticipated medical bills. Jessica Robbins, who works in product development in Chicago, was recently billed $3,300 for a breast MRI she had two years earlier, even though she had prior authorization from her former insurer. Her attempts to resolve the issue led to a confusing and frustrating process involving numerous calls and emails.

Mary Ann Bonita of Fresno, California, faced a similar situation when she received a surprise bill for a chest X-ray after a tuberculosis skin test. She had to pay upfront at an emergency room, only to later receive another unexpected charge. These cases highlight how the No Surprises Act often falls short in addressing broader billing issues.

Zack Cooper, an associate professor of economics at Yale University, noted that while the No Surprises Act addressed specific types of charges, there are many other billing problems that remain unresolved. His research shows that before the law was passed, over 25% of emergency room visits resulted in surprise out-of-network bills.

CMS has received tens of thousands of complaints related to billing practices, although some issues, such as delayed bills, are not regulated by the No Surprises Act. These trends provide valuable insights for potential future improvements in healthcare billing policies.

Michelle Rodio, a teacher in Lakewood, Ohio, experienced a similar situation after being charged $2,700 for a nasal swab following a pneumonia treatment. Despite her confusion, the provider claimed it wasn’t a surprise bill. The lack of a binding estimate for insured patients left her unable to anticipate or reject the charge, highlighting the ongoing challenges in the system.

These cases illustrate the need for continued reform and clearer regulations in healthcare billing. While the No Surprises Act has made progress, it is evident that more work is needed to ensure patients are protected from unexpected and unmanageable medical expenses.