Out-of-Network Healthcare Bills
Federal law now prohibits out-of-network physicians frombilling patients when they weren’t aware. Even though patients have never been responsible when they weren’t notified, out-of-network physicians would hire 3rd parties to attempt to collect, and then sue the patient if they didn’t pay. They’d ultimately get a default judgment when the patient didn’t show up to court, often because the patient wasn’t properly notified and didn’t even know about a court date. At this point the total judgment would often be 2x the original amount because of interest and fees. Finally, the patient’s credit would be ruined, and if they owned an asset like a home, they’d have to pay the judgment offif they ever refinanced or sold.
The Federal No Surprises Act, signed into law by President Trump on 12/27/20 and which became effective 1/1/22, sets to clear this all up. Namely, it requires out-of-network physicians to only deal with the insurance company. If the insurance company won’t pay, the physician can’t sue them in court. Instead, they can only arbitrate (like mediation but where anarbitrator will make an unappealable decision). 1
I think the arbitrators will tend to knock these bills down. A physician cannot charge for unauthorized treatment. Thisviolates basic contract and consumer law. Just as an auto repair shop can’t take your insurance information, repair your vehicle, and then choose not use your insurance and charge you privately for the bill, a physician cannot charge privately without notice and authorization.
Once physicians realize they can’t charge for unauthorized treatments, they’ll begin taking the extra step of confirming directly with the patient once they meet with them (this might occur in an emergency when an in-network physician isn’t available). On the other hand, due consideration must be given to physicians who treat a patient in an emergency, without regard for any insurance, but to assist the patient under the physician’s code of ethics and responsibilities.
1 Like mediation, arbitration is a method to save time and the expense of suing in court. However, an arbitrator’s decision is final, whereas a mediator merely attempts to assist the parties in settling, and has no decision-making power.