Law Bans Many Surprise Medical Bills Starting Now

Number of the Day: The most relevant or interesting figure in personal finance

$744

That’s the typical surprise medical bill families have previously faced for childbirth expenses—one of the more common such bills now illegal under many circumstances.

Surprise bills are usually incurred when someone goes to a doctor’s office or hospital that is in their insurance network but is treated (often unknowingly) by an out-of-network practitioner like an anesthesiologist. And now, under federal legislation that took effect on Jan. 1, they will often be illegal.

“We are taking patients out of the middle of the food fight between insurers and providers and ensuring they aren’t met with eye-popping, bankruptcy-inducing medical bills,” Department of Health and Human Services Secretary Xavier Becerra said in a statement Monday. 

Under the No Surprises Act, passed at the end of 2020, surprise bills for most emergency services are banned for privately insured patients (Medicare and Medicaid patients already had surprise billing protections.) Cost-sharing like co-pays and other out-of-network charges for services like anesthesia or radiology are prohibited if they’re performed at a facility in the patient’s health insurance network. 

Delivering a baby and/or hospitalizing a newborn resulted in a surprise medical bill 19% of the time, according to a study of 2019 data by researchers at the University of Michigan. And while the median surprise bill was $744, 36% of families who got surprise bills were billed more than $2,000, the researchers found. 

Childbirth is one of the leading reasons for hospitalization in the U.S., but just one of the situations that has left patients blindsided by large medical bills not covered by their insurance plan, studies have shown. Surgeries have been another source, with 21% of patients who underwent surgery at hospitals in their health insurance networks between 2012 and 2017 receiving out-of-network bills averaging $2,011, according to a separate study.

Surprise billing for emergency ambulance flights or medevac flights—which brought a median surprise bill of $21,698, according to another 2020 study—is also now banned. Notably, the ban does not cover far-more-common ground ambulance rides, which generate surprise bills averaging $450.

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