What the federal ‘No Surprises Act’ means in California

Betty Chow, a Los Angeles resident, had a cervical disc replaced in August 2020 at a surgery center that was part of her Anthem Blue Cross PPO network.

Thirteen months later, she was dazzled by a nearly $ 2,000 bill from the anesthesiologist who was on her surgical team but who had no contract with her PPO or preferred provider organization.

Chow, a 35-year-old veterinarian, says she discussed the bill with her boyfriend, a registered nurse. He told her about a law in California that went into effect in 2017 banning such “surprise bills” from off-network medical providers who work on network facilities.

Unfortunately, that law does not protect Chow or nearly 6 million other Californians who receive health coverage through employers who pay employees’ medical bills from their own state coffers. These “self-financed” plans are regulated by the US Department of Labor – and are therefore beyond the reach of state law.

But a federal law that went into effect Jan. 1 bridges this gap for the more than 100 million people enrolled in such health care programs across the United States, including the nearly 6 million Californians. And it covers millions in the 32 states that have no laws against surprise bills or have laws that offer only partial protection.

The new federal law, the No Surprises Act, also protects nearly 1 million Californians who are not covered by a 2009 California Supreme Court ruling banning emergency physicians and other emergency services providers from billing HMO patients for off-network fees that do not are paid by their insurance companies – a practice known as balance sheet invoicing.

“Millions more Californians will now be protected from these bills, which are not only unfair but endanger the financial security of families,” said Anthony Wright, CEO of Health Access California, a consumer advocacy group.

It’s high time. Surprising bills have been inflicting financial pain on millions of Americans for far too long.

When patients are seen by providers outside the network that they have not chosen, it is often a double whammy: They pay more themselves – even though their health plan covers some care outside the network – and they may. Later receive balance bills from providers that can total thousands of dollars.

Research shows that surprise bills are common among the nearly 200 million U.S. residents who enroll in private health care programs.

A 2020 study found that 20% of privately insured patients who underwent elective surgery at a hospital that was in their insurance network received surprise bills from providers who were not. Bills from anesthesiologists averaged $ 1,219. Bills from surgical assistants were, on average, more than double that amount.

“When patients pay their insurance premiums, they assume – and I think in fairness – that they will be covered financially,” said Katie Berge, director of federal government affairs at the Leukemia & Lymphoma Society.

The No Surprises Act covers all privately insured in employer-sponsored and individual / family sickness schemes. Medicare and Medicaid are already protecting their subscribers from nasty billing surprises.

The new federal law, which is largely in sync with California, prohibits balance billing for non-emergency assistance from out-of-network providers at networking facilities and for most emergency room care at any facility. Insurance companies must cover these services at network rates, and providers are not allowed to bill patients for amounts beyond that. Providers and healthcare providers need to negotiate how much the plan will pay, leaving patients out of the fight.

Federal law also protects against bizarre bills from out-of-network air ambulance services. A law in California that went into effect in January 2020 does the same thing. But it does not cover the millions of people in federally regulated health plans and has been vulnerable to a possible legal challenge because it may conflict with the 1978 deregulation of airlines, which included air ambulances.

In cases where its provisions are stronger, federal law will trump state laws.

What about enforcement? The federal government will refer to states in cases involving state-regulated plans and in those involving federally regulated if the goal of the complaint is a provider, says Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy. But the federal government will step in if states refuse or are unable to enforce the law, he says.

Federal health officials send letters of enforcement to the governors of each state.

California, with its strong laws against surprise billing, has determined the means and experience for enforcement, even though it has not seen a large number of cases. In the last four years, the Department of Managed Health Care has resolved 1,006 consumer complaints about balance billing, and 467 of them have given total reimbursements of nearly $ 1 million to enrollees, says Rachel Arrezola, a spokeswoman for the department.

Of course, not all bills that surprise patients are regulated by state or federal law. Sometimes people owe more than they believed in their deductible, or their cost sharing was higher than they were aware of, or their procedure was not covered by their health plan, or the facility they chose was not in their network.

So keep an eye on your insurance. Know what and who it covers, what facilities are in the network, how much your own costs are, and how much of your deductible is to be paid.

It will help you decide if a bill is illegitimate. And there will still be illegitimate bills – because people make mistakes. And some doctors act in bad faith.

When you get a bill, do not pay it right away. Ask questions. Compare that to the explanation of benefits you receive from your insurance company – and if it has not arrived yet, wait for it. If there is a discrepancy between what your provider and your health plan say, call them both and try to smooth it out.

If that does not work, do not be discouraged. You can file a complaint to your health plan. And if that does not resolve your issue, please contact the Department of Managed Health Care to open an appeal, either on its website (www.healthhelp.ca.gov) or by calling 1-888-466-2219. The department also has a fact sheet that can answer some of your questions about California’s law of surprise billing.

The federal government has launched a website (www.cms.gov/nosurprises) that can answer many of your No Surprises Act questions and will allow you to file a complaint or dispute a bill. You can also contact a federal “no surprises” helpdesk at 1-800-985-3059.

If you are simply confused about medical bills or lack the confidence to dispute one on your own, the Health Consumer Alliance is a great resource. Find an office near you by going to www.healthconsumer.org or calling 1-888-804-3536.

Chow, a Hong Kong native who has been a patient in the single-payer system there and in the UK, says she is amazed at the US system, “where you pay for health insurance, but then you have to pay more.”

Although California law does not protect her from the anesthesiologist’s $ 2,000 bill, and the new federal law has no retroactive effect, she nonetheless appears to be heading for a happy ending.

After three fundraising attempts by the anesthesiologist and several phone calls from Chow, Anthem agreed to turn the bill down to $ 83 and update the anesthesiologist’s billing office. It still hasn’t happened, but Chow is hopeful.

“I do not really understand what I’m responsible for,” she says, “except $ 83 is much less than $ 2,000.”

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism on health issues. Together with policy analysis and opinion polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is a gifted nonprofit organization that provides information on health issues to the nation.

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