When it comes to medical bills, no one likes surprises

I’m not really much on surprises, although I do like the kind when you find some cash in a jacket that you haven’t worn in months. Opinions on surprises such as birthday parties, last-minute vacations, or pop-ins by relatives vary from person to person.

Opinions on surprise bills, however, are very one-sided, whether those bills are for utilities, cell phone service, or medical care. These surprises are overwhelmingly met with confusion and alarm, and often they are accompanied by expletives and phrases like, “What in the world is this?”

All of us will likely continue to experience “sticker shock” when we get medical bills, simply due to the price tag associated with getting quality medical care. However, there is now relief from certain types of billing practices from providers who aren’t in your insurer’s network. Effective on Jan. 1 of this year, the federal No Surprises Act protects patients from surprise medical bills, which are bills that happen when insured patients inadvertently receive care from out-of-network hospitals, doctors, or other providers they did not choose.

Here are some things you need to know for context. First, your insurer establishes a network of health care providers by negotiating discounts on what providers charge for their services. Providers who agree to those discounted rates join the insurer’s network and agree to bill the insured patients only for the in-network cost-sharing amounts (deductibles, copays, and coinsurance). Out-of-network providers, which some insurance plans will pay but at lesser amounts than in-network providers, can set their charges at whatever they want. Second, hospital services and physician services are often billed separately, and while a hospital may be in-network, the hospital may contract with physicians who are out-of-network. Third, not all physicians within a hospital may be in the insurer’s network.

These industry quirks set up the following common scenario that too frequently occurred prior to this year: You go to the emergency room at an in-network hospital for an emergency appendectomy, but the anesthesiologist who put you under for the surgery is out-of-network. The hospital will file a claim with your insurance company for the services provided to you, a portion of which you will be responsible for through cost-sharing. The insurer’s payment ― together with your payment ― equals the rate negotiated between the insurer and the hospital. The out-of-network anesthesiologist will also file a claim with the insurer, and the insurer may pay a portion of the charges for the anesthesiologist’s services. You will be responsible for the balance, and you don’t have the benefit of a big insurer negotiating a discount for you. All of this will come as a surprise to you, and that’s where we get the term “surprise billing.”

The purpose of the No Surprises Act is to protect you from this type of surprise, whether in an emergency or non-emergency situation. Also, if a ground ambulance takes you to an out-of-network hospital, the law protects you from surprise billing by the hospital. Notably, though, you may receive a surprise bill for the emergency transport. Most ground ambulance providers are out-of-network, and Congress opted to exclude them from the requirements in the law. The law does protect patients from surprise billing by air ambulance providers, however.

There are limited exceptions. One example is if, in a non-emergency situation, you knowingly and voluntarily choose to use an out-of-network provider and agree to waive protections under the law. This might come into play when you have a procedure such as a knee replacement or a scheduled delivery of your baby.

If you are uninsured or as an insured consumer desire an understanding of your cost-sharing responsibility ahead of time, the law requires providers to make available a good-faith estimate of expected costs before a service is provided. The document must also indicate whether the provider’s services are out-of-network, and if so, where in-network services may be provided.

If you think all of this is complicated, it is, and the enforcement of all of these new rules will be complex as well. The best thing to do if you think you have received a surprise bill is to contact your insurer. After all, the goal of the law is to take patients out of the middle of disputes between patients and providers. The law sets up a process for providers and patients to informally negotiate whether and how much the insurer will pay toward the out-of-network provider’s charges. If they can’t agree, then a formal arbitration process is in place to resolve the dispute. If your insurer can’t help, contact the state insurance department.

The long-term effects of the No Surprises Act on provider network development and cost transfers through premium increases remain to be seen. However, there is no question that the new law offers considerable and long-awaited protection from surprise billing and advances healthcare transparency through up-front cost estimates. Opening your mailbox will hopefully bring much more welcome surprises.

Editor’s note: Craig Wilson, J.D., M.P.A., is the director of health policy for the Arkansas Center for Health Improvement, an independent, nonpartisan health policy center in Little Rock. The opinions expressed are those of the author.