Christopher Garmon, assistant professor of health administration in the Bloch School of Management, has done extensive research on medical billing, with a focus on how insured patients often are shocked by huge bills from out-of-network providers.

The issue was partially addressed by federal legislation passed in late December. Once this surprise medical bill legislation goes into effect in 2022, most out-of-network providers will no longer bill patients directly. Instead, providers and insurers must negotiate how much the insurer will cover. If they can’t agree, an independent arbitrator would step in. 

This was the kind of federal-level legislation Garmon and other experts have been advocating for years. He sat down with UMKC Today to share eye-popping examples of the kinds of situations the new legislation will affect.

How do you define “surprise medical bills” in the context of your research?

My research (and recent federal and state legislative efforts) have focused on surprise medical bills from an out-of-network provider that the patient did not expect and could not reasonably avoid. For example, if you go to an emergency room of a hospital in your health plan’s network, the expectation is that all of the care received at that hospital will be in-network. However, the emergency room physicians may be out-of-network even though the hospital itself is in-network. Because there is no contract between the out-of-network physician and your health plan, there is no agreed-upon price for the physician’s services. The physician can charge whatever amount she thinks is reasonable and the insurance company can reimburse whatever amount it thinks is fair. These two amounts are often far apart and the physician may bill the patient directly for the balance. It is this “balance bill” from the out-of-network doctor, often for hundreds or thousands of dollars, that places a devastating burden on the patient.

What are the health-care situations in which surprise bills are most likely?

Most of the research suggests that roughly 20 percent of emergency room cases lead to surprise out-of-network bills, although some recent research indicates that it may be even higher. Roughly 10 percent of newborn deliveries may involve a surprise medical bill (for example, when the hospital and obstetrician are both in-network, but the anesthesiologist administering the epidural is out-of-network). One area where surprise out-of-network medical bills are common is ambulance service. Roughly 50 percent of ambulance cases involve an out-of-network ambulance. In other words, if you have an emergency and call 911 needing an ambulance, it’s basically a flip of a coin whether that ambulance is in your health plan’s network or not. It is important to note that the federal legislation passed in December will not protect patients from out-of-network ground ambulance bills. In general, the more severe the injury or complexity of treatment, the more likely a patient is to receive care from an out-of-network provider.

Can you share one of the worst examples of exorbitant surprise medical billing that you’ve come across?

One of the most egregious cases was documented by Elisabeth Rosenthal for the New York Times who described the experience of a man who underwent an elective neck surgery. He made sure the hospital and surgeon were both in his health plan’s network when scheduling the surgery. He even made sure the anesthesiologist on call the day of his surgery would be in-network. However, during the surgery, another surgeon was called in to assist. This assistant surgeon was out-of-network and he received a bill from this surgeon for more than $110,000. This extreme case highlights that, without legal protections, there is no way to guarantee that a patient can avoid a surprise out-of-network medical bill even in elective situations and even when the patient takes every precaution to avoid them.

What can people do to protect themselves from surprise medical bills?

First, it is important to point out that those covered by Medicare (including Medicare Advantage plans), Medicaid and Tricare are legally protected from surprise out-of-network medical bills. For those with private insurance, it depends on where you live and the type of health plan you have. Unfortunately, until the new legislation goes into effect, there are many patients who are vulnerable to surprise out-of-network bills regardless of what they do to prevent it.

Some states have protections against surprise out-of-network billing. Missouri recently implemented a law protecting patients from surprise out-of-network medical bills, but only for emergency services. In addition, state protections from surprise billing only apply to patients covered by health plans that are regulated by the state. Many people who receive their health insurance through their employer have health plans that are regulated by the federal Department of Labor. State protections against surprise billing do not apply to them.

What needs to happen next?

Given the lack of protections for patients with federally regulated health plans, there was a strong consensus that a federal solution was needed. Still, the recent federal legislation does not offer complete protection for patients. While it protects patients from air ambulance bills, ground ambulances are excluded, so patients are still vulnerable to bills from out-of-network ground ambulances. Future federal legislation should protect patients from ambulance surprise bills.