Medical Surprise Billing Banned in Michigan with Bipartisan Support

In Michigan, surprise billing may have reached its end after a ban on the practice was signed into law by Gov. Gretchen Whitmer in late October. The legislation passed through state Legislature with wide bipartisan support.

The new laws forbid medical providers from sending out major surprise bills to patients who received emergency medical care that was outside their insurance network.

The laws also address non-emergency situations. For those who are receiving non-emergency medical care that has been scheduled in advance, an out-of-network provider must send a disclosure form to the patient at least 14 days before the scheduled service. This form must clearly detail for the patient how their insurance might not cover all services, leaving the patient personally responsible for any costs not covered.

Medical Providers Will Negotiate with Insurers, Not Patients

The new laws will also mean that out-of-network emergency services will be negotiated not with the patient, but between the out-of-network providers and the patient’s insurance company. The insurance company is expected to pay the provider either the median negotiation amount in the area for the medical service in question or 150% of what Medicare would pay, whichever is greater.

“The biggest thing—and I think it’s the goal that both sides agreed on—is we wanted to get the patient out of the middle,” said Jeff Romback, a deputy director at health insurance industry group Michigan Association of Health Plans. “If you get that surprise bill, you really don’t know who to blame or who to call, but you’re on the financial hook for it and they could go to collections against you.”

Medical care in the United States is already stressful enough, but many Americans have found themselves plagued by an additional concern: surprise billing, incurred by out-of-network medical services.

Surprise billing is quite common, and it can be difficult to avoid—even when you make sure that you’re going to an in-network hospital. The truth is, many in-network hospitals have some out-of-network doctors working there that will later result in surprise billing. These doctors may be specialists, or may be visiting the hospital and therefore not part of your insurance company’s network.

All too often, this means that Americans get hit with expensive surprise billing in the mail for something they believed they had already taken care of. In some cases, charges for an out-of-network doctor can be incurred even when the patient only sees that doctor for a moment. This kind of unexpected financial cost can only worsen what may already be a sensitive medical situation, as in the case of a woman who was hit with a surprise bill after her miscarriage.

Detroit Free Press reports that a national study of almost 350,000 elective surgeries with in-network doctors and facilities found that a whopping 20% of patients still ended up getting hit with surprise billing from an out-of-network provider.

According to Romback, surprise medical billing tends to occur with a few particular doctors and services, including anesthesia, radiology, pathologists, hospitalists, and emergency room physicians. This is because these providers often aren’t actually employees of particular hospitals, but instead contract to work there.

Some medical providers may be concerned that this negotiated amount would underpay them in the event of a “complicating factor” like a middle-of-the-night emergency complex surgery, but the new laws would allow extra payment from insurers in these instances.

Some doctors were initially resistant to the new legislation. Indeed, the Michigan State Medical Society, which represents more than 15,000 doctors, opposed earlier versions of the legislation. However, they made peace with the final version.

“We still had some reservations,” said society President Dr. Bobby Mukkamala, “but we were sort of less opposed given that some of what we wanted made it into the final version.”

Other doctors continued to oppose the legislation even including the final version. Dr. Courtney Abernathy of Michigan Society of Anesthesiologists said the law underpays them and gives too much power to insurance companies.

“We are in favor of addressing surprise medical billing, but we were opposed to the legislation that passed because we don’t feel it was a balanced approach,” Abernathy said. “Yes, accountability is needed to keep groups from issuing surprise medical bills because patients need to be protected from that. But insurers need to be kept accountable as well.”

Michigan is not the first state to introduce legislation to tamp down surprise billing. Now, it is one of 31 individual states that have some kind of consumer protections against surprise medical bills, though some are more comprehensive than others.