The most recent coronavirus relief bill included legislation that would reign in the high-cost practice of "surprise medical billing." The high cost of medical care has been an issue that both parties have attempted to tackle over the years and although many see this as a step in the right direction, there is anticipation that the Biden administration will face an uphill battle with implementing and regulating this new legislation.

What Is Surprise Medical Billing?

The term is used to describe unexpected medical costs that insured Americans incur when medical services are rendered. The medical services rendered are not covered by the individual's insurance and the cost gets passed to the patient. The bill will typically be the difference between the out-of-network provider's charge and the amount that the individual's health insurance will cover. For example, an individual can go to an emergency room at a hospital that is in-network but might be seen by a physician who is out-of-network. That physician would then bill the patient an unexpectedly high bill, often higher than what an average health plan would charge.

Recent data shows that at least one in five insured American adults has received a surprise medical bill in the past two years. In the emergency room setting, approximately 18% of visits resulted in a surprise medical bill.

The new legislation that addresses surprise medical billing would discontinue the practice of out-of-network physicians sending high-cost bills to patients. Instead, the legislation will now require healthcare providers to settle the cost of a surprise medical bill with the insurance company. The settlement will be done through a variety of ways but will often include an assessment of what the average cost of the service rendered is in that geographic location. Other factors will also be taken into consideration when settling on a price. The end goal is to settle on a fair price that can be passed down to the individual (if at all). The new changes under the legislation will take effect in 2022.

Biden Administration Faces an Uphill Battle

While both Biden and the Trump administration have voiced their opinions on the need for health care reform, it remains unclear exactly how President-elect Biden will implement the new legislation. In large part, the actions taken by the incoming administration will determine whether or not the legislation on surprise medical billing will be successful or not. Furthermore, It is yet to be determined whether insurance companies or health care providers will have more power in tipping the scales in their favor when it comes to billing a patient.

President-Elect Biden has nominated Xavier Becerra to lead the Health and Human Services department. Congressional aides for senators who currently serve on the committee have stated that questions regarding how the administration will handle surprise medical billing are likely to come up in Becerra’s confirmation hearing.

One of the key components at play is the new arbitration system. Under the arbitration system, an independent reviewer will be able to decide what the final payment of a bill is after both the insurance company and the medical provider submit an offer of how much the service should cost. The independent reviewer will look at several factors, including the average in-network cost in deciding the final price. As this new arbitration system is created, there are legitimate concerns that interested lobbying groups will work to sway the guidelines of the system in favor of either providers or insurance companies.

The new administration will also need to weigh how it will manage emergency room surprise billing. According to the new surprise billing legislation, there will be a ban on surprise billing for emergency room services including anesthesia, ambulance services, and caring for a person without their consent. Regulation in this regard will need to include how consent for a medical service is defined and how patients will be informed about the services they are receiving and any potential costs they will incur. This too will impact how special interest groups lobby the incoming administration.

While it is clear that incoming President Biden will continue to uphold the protections of the Affordable Care Act, it remains unclear how this new legislation on surprise medical billing will weave itself into the ACA as far as implementation and regulations go.