Medical Billing Laws Need to Close Loophole that Allows Surprise Charges

According to a recent article, the Affordable Care Act (ACA) needs some reform in its medical billing laws to close a loophole that allows for surprise healthcare charges.

ABC News reports that there are two types of employer-based healthcare plans out there and the ACA did step in with some unique provisions that affect both types.

The provisions included the allowance of adult children to remain on their parents’ plan until they turned 26 and preventative care options without out-of-pocket expenses being passed on to insured patients.

Insurers State-Regulated Policies vs. Federally-Regulated Self-Funded Policies

As indicated in the report, 60 percent of American employees offered insurance through their place of employment are signed up with a state-regulated policy sold by an insurer such as Aetna or Cigna that has negotiated a group contract with the business, non-profit, or municipality.

The other 40 percent of workers are covered through employer self-funded healthcare plans that may be administered by these insurance companies but have claims against the plan paid through the employer’s financial resources. This type is more common with larger well-invested companies.

Medical billing laws are in place in nearly half of the 50 U.S. states. These medical billing laws vary from region to region and provide workers with legal recourse should they be presented with surprising and sometimes unreasonably high medical balance bills.

The trouble with this regulation is that it doesn’t usually extend to self-funded plans and that leaves those employees with this kind of coverage in the lurch.

There are some federal medical billing laws established under the 1974 Employee Retirement Income Security Act (ERISA) and these provide consumer security for workers with self-funded insurance policies. ERISA regulates plans in private industry, but it doesn’t disallow medical balance billing.

What is Balance Billing?

Surprise medical bills are most often the offspring of a common and unique relationship between independent doctors, physician groups, and hospitals.

Insurance companies have contracts with certain hospitals and medical providers which identify them as in-network institutions and caregivers.

Sometimes, an insured consumer does all the appropriate research to be treated within this in-network parameter but is surprised when an out-of-network physician has treated them within an insurance-approved hospital outside of their awareness.

This physician has no obligation to keep his rates within the contracted range that the medical center typically would have with other providers. In this situation, the insurance company pays its agreed upon amount and the balance is passed on to the patient.

According to the ABC News article, the passage of federal medical billing laws that prohibit balance billing with both types of employer-based health policies would be the simplest solution at reform. This simple solution, however, might be one of the most difficult to pass in an environment of extreme political divisiveness.

Have you or a loved one received an out-of-network surprise balance bill from a physician operating at an in-network hospital, you may have a legal claim and we could help. Consider filling out our form for an obligation-free initial consultation with one of our expert attorneys.

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