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• Robert Preidt
• Posted August 17, 2021

How Did New 'Surprise Medical Bill' Laws Affect Your State?

Anesthesia is a vital part of almost every surgery, but unexpected bills for the service can cause a lot of pain. Now, a new study finds that these costs fell in several states that introduced legislation targeting "surprise" billing.

"These price declines show that state surprise billing laws both directly lower out-of-network prices and indirectly lower in-network prices, providing evidence that surprise billing legislation may have changed provider-payer negotiating dynamics," said study first author Ambar La Forgia. She is assistant professor of health policy and management at Columbia Mailman School of Public Health, in New York City.

The legislation focused on prices paid to in- and out-of-network anesthesiologists in hospital outpatient departments and ambulatory surgery centers.

Anesthesiology is among the specialties with the highest potential for surprise bills since patients don't usually choose their anesthesiologist, the study authors explained.

For the study, the researchers analyzed prices before and after passage of surprise medical bill legislation in California, Florida and New York between 2014 and 2017, and compared them to prices in 45 states without surprise billing laws.

The data came from a Health Care Cost Institute database of more than 2.7 million patient claims. The data included claims from Aetna, UnitedHealthcare and Humana.

After their surprise billing laws took effect, the unit price paid to out-of-network anesthesiologists at in-network facilities dropped $12.71 (14%) in California, and $35.67 (17%) in Florida. (Unit price is the allowed amount standardized per unit of service.)

After the law was enacted, New York's price initially rose, then dropped by $41.28 by the last quarter of 2017.

In-network prices dropped $10.68 (11%) in California; $3.81 (3%) in Florida; and $8.05 (7%) in New York, according to findings published online Aug. 16 in JAMA Internal Medicine.

Late last year, Congress passed the No Surprises Act to protect patients from surprise medical bills.

"Currently, the interim final rule on the No Surprises Act suggests providers and insurers will negotiate out-of-network prices and disputes will be resolved through arbitration, similar to New York, but specifics on how arbiters should determine a fair price are still being decided," La Forgia noted in a journal news release.

"Going forward, this research informs how the No Surprises Act could influence in- and out-of-network prices depending on which payment rules are implemented and how a fair price is defined," she added.

Surprise billing laws passed by states have several similarities. La Forgia said they differ most in how they determine amounts paid for out-of-network services.

"Some states, such as California and Florida, tied provider payments to median in-network rates, Medicare rates or the usual and customary provider charges, while other states, such as New York, developed an independent dispute resolution process, which uses a third-party arbiter to resolve payment disputes between insurers and providers," she explained.

More information

The Kaiser Family Foundation has more on surprise medical bills.

SOURCE: JAMA Internal Medicine, news release, Aug. 16, 2021