Frequently Asked Questions

Millions of Americans have received surprise medical bills in the mail weeks, or even months, after receiving emergency services at in-network facilities. Policymakers correctly sense that they must act to prevent this pressing issue. But, some lawmakers insist on using federal fiat to impose rate-setting on America’s medical providers. On this page, taxpayers and consumers can learn all about the issue of surprise billing, and read about the various “solutions” being proposed by our elected representatives.

When and why do patients typically receive surprise bills?

In some cases, patients find themselves in situations where they are unable to receive in-network care. Even if they are able to attend an in-network medical facility, some members of their care team (e.g. anesthesiologists, emergency room physicians) may not accept the patient’s medical insurance. In these situations, care providers may bill patients for expenses that cannot be recovered from insurers. This is a pervasive problem: according to a 2018 National Opinion Research Center survey, 57 percent of American adults have received a “surprise bill.”

Will current federal price-fixing (rate-setting) proposals in Congress protect consumers from surprise billing?

No. Government price-fixing, as seen in the Alexander-Murray (S.1895) and Pallone-Walden (H.R. 3630) bills under consideration in Congress, would empower bureaucrats to sharply curtail payments overnight using arbitrary “averages” of in-network rates of “similar” procedures. But as anyone in the medical profession realizes, even similar professions and procedures can attract significantly different pay scales. If bureaucrats and/or political appointees use these easily-manipulatable metrics to keep physician payments below market rates, access to care will suffer as a result. This would be a particularly large problem in rural America, where hospitals are always struggling to recruit qualified personnel.

Can wider healthcare reforms prevent issues such as surprise billing?

While introducing market reforms can keep surprise billing at bay for millions of patients, a broader array of comprehensive changes is needed to ensure that consumers receive quality medical care at an affordable price. More competition is sorely needed across the healthcare sector as current mandates and regulations protect current insurers against upstart competitors offering simpler plans at a lower price. In addition, certificate-of-need laws prevent hospitals from expanding services and hiring more personnel. Congress should focus on removing barriers to choice and competition and allowing tax-free dollars to be used for the purchase of individual insurance rather than just employer-sponsored plans.

How has government intervention in healthcare impacted surprise billing?

As the government has increased its involvement in the healthcare sector, insurance networks have steadily narrowed. Due to federal requirements imposed under the Affordable Care Act (ACA), less insurance premium income was required to cover far more services that many patients did not necessarily want or need, such as maternity benefits and smoking cessation. As a result, insurance reimbursement offerings to physicians grew less attractive, and many providers could not afford to accept many health care plans. This has resulted in health plans that cover fewer physicians and increased the likelihood of doctors being out-of-network even at an in-network facility.

Won’t government price-fixing reduce costs for taxpayers?

The Congressional Budget Office has released estimates of various surprise-billing related proposals and found that price-fixing legislation (i.e. S.1895, the Lower Health Care Costs Act) would increase federal revenues by $26 billion over the next ten years. In turn, this revenue is used in S.1895 to increase spending on a variety of healthcare programs. But as healthcare policy expert Dr. John Goodman points out, the CBO’s estimate is inadequate and fails to account for numerous factors. In fact, it’s likely that price-fixing would create net costs for taxpayers. Dr. Goodman notes, “Because they have less take-home pay, doctors will pay lower taxes [as a result of price-fixing]. And here is the bottom line: doctors are in a higher tax bracket than the average employee. That means that the government revenue gain from taxpaying employees will be offset by an even greater revenue loss from taxpaying doctors.”