How the Ban on Surprise Medical Bills Helps Consumers

One of the most costly and aggravating practices in medicine will be going away in a year. But you still have to watch out until then.

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Update: President Donald Trump signed the $900 billion pandemic relief bill Sunday night, so all the provisions in the measure now become law. This article was originally published Dec. 22.

In addition to financial help for struggling Americans, the COVID-19 aid package passed by Congress Monday night provides relief on another front: ending surprise medical bills.

Those are the bills you get when an out-of-network medical provider unexpectedly renders your care. The new measure puts an end to making consumers responsible for the difference between the provider’s charge and their insurer’s allowed amount—a practice known as balance billing.

The change takes effect in one year, on Jan. 1, 2022, once the $900 billion pandemic relief bill is signed into law by President Donald Trump.

Surprise medical bills are one of the biggest healthcare headaches for consumers. Almost 80 percent of people in a recently published national survey by Kaiser Family Foundation, a health policy research organization, said they want to see them banned.

More on medical bills

In addition to ending balance billing, the new measure also ensures that all emergency room medical care is billed to a consumer at the “in-network” (lower) rate, regardless of whether the hospital or individual healthcare provider is in or out of the patient's insurance network.

And it removes the consumer's burden of dealing with surprise medical bills or having to negotiate payment of them. Instead, the bill mandates that insurers and healthcare providers negotiate or use dispute resolution to determine payment amounts, says Jack Hoadley, PhD, research professor emeritus at the Health Policy Institute at Georgetown University, who has written on the topic of medical billing.

“It’s a monumental moment for American consumers,” says Chuck Bell, programs director at Consumer Reports who has long advocated against surprise medical bills. “We’ve collected hundreds of stories over the years detailing the pain surprise bills exact on household finances, and for Congress to ease this burden during the COVID-19 pandemic is a massive win for consumers.”

Angela Carter, from Bremen, Ohio, and her family are among the millions of Americans who know about the problem all too well. Late one night in June 2019, she says her husband awoke with excruciating head pain. Fearing the worst, Carter took him to the emergency room for treatment.

The ER was covered by her husband’s insurance through his employer, but as they later learned, the doctor who treated her husband was not. The result: a bill for $1,344.

“We were told there was nothing we could do to dispute the bill and had to pay it in full,” Carter says.

Among other things, the relief bill is intended to help patients avoid the financial fallout of medical situations in which they have little or no control, says Karen Pollitz, a senior research fellow at Kaiser Family Foundation. “In an emergency, you don't pick who treats you, and you just go to the closest ER or wherever the ambulance takes you.”

One group not touched by the bill: the uninsured.

“The new law does little to help end costly medical bills for the tens of millions of Americans who’ve lost health insurance as a result of an unprecedented job loss during the pandemic, says CR’s Bell.

The New Policy’s Key Elements

Here’s a more detailed look at what the bill does and doesn’t cover.

Bans Balance Billing
The bill “holds the patient harmless,” says Pollitz. “A person should not owe more than the in-network amount for the surprise medical bills for emergency services, or for services provided by out-of-network doctors when the patient is treated at an in-network facility or hospital.”

In other words, in circumstances in which you have not previously agreed to an out-of-network rate, you’ll pay only copays, deductibles, and any other related in-network charges, Pollitz says.

Ends Emergency Room Surprise Bills, Air Ambulances Included
Almost 18 percent of emergency room visits resulted in a surprise medical bill, according to a February 2020 analysis by Kaiser Family Foundation. The new bill mandates that all emergency room services—including air ambulances—be billed at your insurers in-network rate.

Requires Consent for Planned Procedures
For scheduled procedures, such as giving birth or getting knee or hip replacement surgery, you may voluntarily decide to use a healthcare provider who is not covered by your insurance.

In such cases, the bill requires that you are notified three days ahead of time with something called an “Advance Explanation of Benefits,” at which time you may provide consent to being billed at the out-of-network rate, according to Jen Taylor, senior director for federal relations at Families USA, a patient advocacy organization.

In cases where consent is provided, a patient would not billed the in-network insurance rate but rather at the higher, out-of-network rate, says Kevin Lucia, JD, a research professor at Georgetown University and co-director of the Center on Health Insurance Reforms.

But for providers that you typically cannot choose—anesthesiologists, radiologists, pathologists, or lab services, for example—Lucia says you won’t be on the hook if charged a higher, out-of-network amount.

Removes Consumers From Bill Negotiations
In addition to being stuck having to pay a big medical bill, the other pain point for consumers has always been the administrative burden of trying to get the insurer to cover the bill or attempting to negotiate the payment amount or terms, says CR’s Bell.

“Consumers tell us it can take dozens of phone calls, hours of discussion and waiting on hold in order to deal with these bills,” Bell says.

The bill mandates that insurers and physicians or hospitals first negotiate the payment rate, Lucia says. And if they can’t reach agreement, the bill allows them to go before an arbitrator to determine how much payment the insurer will provide. The consumer doesn’t have to get involved with the process.

Applies to Most Health Insurance Plans
The proposed legislation extends to all types of health insurance plans you get from an employer as well as marketplace plans, including those offered by the Affordable Care Act, says KFF’s Pollitz. The only kind of insurance it doesn’t include are so-called short-term insurance plans that typically provide coverage for about six months or less and have relatively low premiums.

Not Included: Ground Ambulance Services
The bill also doesn’t apply to ground ambulance services, which are typically operated by municipalities under contracts with hospital emergency departments. Instead, the bill establishes a special advisory committee to study how consumers could be better protected from surprise bills relating to ground ambulance services with the expectation that they will also come under similar regulation in the future, says Georgetown’s Hoadley.

How to Fight a Surprise Medical Bill

Unfortunately, because the new legislation on surprise medical bills won’t take effect for another year, experts and advocates say you still have to pay close attention to what is considered in-network for your insurance—even in an emergency.

That’s especially true as a new plan year begins, says CR’s Bell, which could mean changes to the roster of doctors and other providers or facilities covered under your plan.

Meanwhile, here’s how to avoid or handle a surprise medical bill:

Plan ahead. If you’ve scheduled a surgery or procedure at an in-network facility, call ahead and ask for a list of every medical provider who will be part of your care whom you may not have chosen yourself, such as an anesthesiologist.

Then phone your insurer to confirm that each person is in-network. Don’t rely on your insurer’s website for confirmation, says Bell, because those are notoriously out of date.

And if you find you or a loved one headed to a hospital in an ambulance? If you’re able, ask to be taken to a hospital that is in-network for your insurer, Bell says.

Negotiate the bill. There are a few ways to do this if you’re stuck with an unexpected out-of-network bill. First, call the insurer and ask whether it will consider a one-time exception and agree to cover the bill at the in-network rate.

If that doesn’t work, you can file an appeal. Another step to consider: Phone the healthcare provider and explain that you’re paying the bill out-of-pocket and ask whether it will lower your charge to reflect your insurer’s in-network rate; doing so could save you about 30 percent of the cost.

Double-check the billing amount. You can also ask for an itemized bill and confirm that individual charges are correct. Up to half of all medical bills contain duplicate charges for tests or procedures or for medication you did not receive, according to the Patient Advocate Foundation.

You can also compare charges for specific procedures in your ZIP code by looking them up in the Knowing those costs could help you negotiate the bill down further.

Check your state laws, and complain. Thirty-two states and the District of Columbia have enacted legislation that protects consumers from surprise medical bills to varying degrees. If you believe you’ve been wronged, file a complaint with your state’s health insurance agency.

Get help. The Patient Advocate Foundation is a free, nonprofit group that helps people deal with unaffordable medical bills. Contact it at or 800-532-5274.

Head shot of CRO author Lisa Gill

Lisa L. Gill

As a dorky kid, I spent many a Saturday at the Bloomington, Ind., public library, scouring Consumer Reports back issues for great deals. Now, as a (much) bigger kid, that's still my job! Identifying products and services, especially in healthcare, that are safe, effective, and affordable—and highlighting those that aren't—is my top concern. Got a tip? Follow me on Twitter ( @Lisa_L_Gill)