Medical billing surprises? New Ohio, federal laws aim to protect patients.

Patients who get stuck with bills after accidently going out-of-network will be protected under two new laws — one state and one tucked into the new federal spending package.

The practice the bills take aim at is often called surprise billing and typically happens when an insured patient thinks they are in-network, such as a patient at an in-network hospital receiving care from a contractor there who is out of network.

The new state law will go into effect January 2022 and is for fully insured plans.

The federal law protecting against surprise bills comes after years of failed attempts and big lobbying spending on all sides. The federal law also goes into effect in 2022 and covers fully insured and self-insured patients.

The details still need worked out on how the federal and state laws will layer together in Ohio.

The Ohio law notably goes a step further because it regulates when there’s a surprise bill related to an ambulance ride, while the federal law did not cover that scenario.

Loren Adler, associated director at the USC-Brookings Schaeffer Initiative for Health Policy, who has been tracking surprise billing regulations, said with the inclusion of protection from ambulance surprise bills, he believes the state law is meaningful new protection and crafted in a strong manner.

“The ground ambulance market in many states is currently sort of like the wild west, so Ohio’s new law should do a lot to improve payment for ground ambulances and protect at least fully insured plan enrollees from a common source of surprise bills. Hopefully the federal government will eventually add a protection for ground ambulances as well,” Adler said.

The bill signed into law by Gov. Mike DeWine was sponsored by Rep. Adam Holmes, R-Nashport. It was unanimously approved by the Ohio House of Representatives in May and overwhelmingly passed the Ohio Senate in December.

Ohio now has a law that is supported by health plans, providers, advocacy groups and business organizations, Ohio Association of Health Plans President CEO Kelly O’Reilly said. The state and federal laws are similar, she said, but not the same, so they still have to sort out what the unexpected passage of both means.

“It’s like the most 2020 thing ever, that after a decade of doing this, Congress acts the day after Ohio acts, finally, after all these years,” O’Reilly said.

Ohio Department of Insurance officials say they have dealt with surprise billing complaints for years, which surveys indicate are a common experience for patients. In Ohio, on average 18% of emergency visits result in at least one out-of-network charge, per the Kaiser Family Foundation.

“If you or a loved one is having a heart attack, you don’t typically stop to look if the closest hospital is in your network,” said Carrie Haughawout, deputy director of the Ohio Department of Insurance.

Surprise medical bills can happen at both scheduled procedures and emergencies. Even within an in-network facility, out-of-network charges for professional services can occur, Kaiser Family Foundation notes, in a February analysis of surprise billing. That’s because the doctors who work in hospitals often do not work for the hospitals but “rather they bill patients separately and may not participate in the same health plan networks that cover the in-network facility.”

“One of America’s biggest financial concerns about their health care isn’t insurance expenses and it’s not always drug cost, but it’s the fear of an unexpected bill,” said Latoya Peterson, AARP Ohio advocacy director, who lobbied in favor of the protections. “At a time like this, with a pandemic, we think this kind of legislation, at both the state level and the congressional level, is absolutely critical.”

A key take away for consumers is that if they get a surprise bill from accidently going out-of-network when the new rules are place, Haughawout said they will be held harmless and taken out of the middle. If an insurance company and a provider can’t agree on a fair price, it will be their job to work out a solution directly with each other.

The first step in the new system under the Ohio law will be for the insurer and health care provider to have the option of settling on the highest of three: the median in-network rate, out-of-network rate or Medicare rate for the area. If there’s still a dispute, an arbitration system will be used to settle the price. .

Holmes, the bill sponsor, noted that there had been efforts to tackle surprise billing before his bill passed, and he gave credit to former state Rep. Jim Butler, R-Oakwood, for getting the ball rolling. The process at times felt fragile, he said, but it ended up passing with overwhelming and bipartisan support.

“Everybody saw in the COVID crisis and economic crisis, people just can’t afford these kinds of bills now. They can just crush somebody. So it was a golden moment,” Holmes said.

The Story So Far

Previously: For more than two years, federal lawmakers and lobbyists have debated different surprise billing legislation and similar bills have been debated for years in the Ohio legislature as well.

What’s new: Two laws, one federal and one state, passed. The state law covers fully insured plans. The federal law covers both when employers self-insure and when they are fully insured.

What’s next: The laws will go into effect in 2022 and essentially mean that patients won’t be stuck with the balance of the bill that’s not covered if they accidently go out of network. The details still need to be hammered out.

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