The problem of surprise medical bills has come increasingly into the public’s eye in the past year. Surprise billing refers to medical bills that individuals did not realize they owed. Often these bills arrive months after the initial health care bills arrive, and they usually cover costs that the individual’s insurance company did not pay.
While surprise billing is most frequently seen following emergency room visits, it can occur with virtually any type of health care and most often includes out-of-network fees. While average health care costs have gone up for most Americans, unexpected bills further increase the stress and frustration of affording appropriate health care these days.
All levels of government are starting to take on the health care and insurance industries in an effort to protect unsuspecting constituents who have the right to appropriate health care at a reasonable cost. These measures are often backed by lawmakers from both parties who realize that health care bills are making the lives of the average American much too difficult. In New Mexico, a new law that was signed in 2019 and that went into effect at the beginning of 2020 aims to lighten the burden of surprise bills statewide while also addressing several other problems that are common in health care billing.
An Increase in Surprise Bills Statewide
Legislators in New Mexico began looking into the surprise billing problem within the state in 2017 when they recognized that the number of consumer complaints over this matter was rapidly growing. The state’s Superintendent of Insurance collaborated with the University of New Mexico’s Robert Wood Johnson Foundation to poll and study a variety of experiences that residents had experienced with medical billing. The findings were dismal in some cases with approximately 20 percent of insured individuals having received a surprise bill. The majority of surprise bills related to emergency room or surgical expenses. Some people complained of out-of-network charges when they had thought they were visiting an in-network facility or provider. Others complained of receiving a doctor’s bill that they did not know they owed.
After seeing these results and holding several public forums, the office of the Superintendent of Insurance put together potential legislation for the state, and Representative Nathan Small and Senator Linda Lopez took the bill to congressional leaders.
The Road to Passage of the Surprise Billing Act in New Mexico
The Surprise Billing Act was introduced to the New Mexico Senate on January 24, 2019 by Senator Linda Lopez. After further amendments, it was passed unanimously in the Senate before being sent to the House of Representatives. Here, it was also passed unanimously after amendments, and both houses of Congress agreed with the final proposed bill on March 15. The governor then signed it into law on April 2 with the stipulation that it would go into effect on January 1, 2020. This gave insurance companies and medical facilities time to make necessary changes in their billing and notification practices so that they could be in compliance once the act went into effect.
What Does New Mexico’s Surprise Billing Act Cover?
Of course, the main reason for the Surprise Billing Act’s passage was to decrease and ultimately eliminate unexpected bills for consumers. This is a very broad bill that covers nearly all types of insurance and health benefit plans found across the state. This includes the following:
- Individual health insurance policies
- Individual health benefits plans
- Certificates of insurance
- Blanket health insurance policies
- Individual and group health maintenance organization contracts
- Individual and group nonprofit health benefits plans
First, the law defines what is meant by a surprise bill. This refers to a bill that is in excess of what the individual expected to pay under his cost-sharing obligations through his health insurance company. It refers to bills from nonparticipating providers as well as to out-of-network care. While many surprise bills in New Mexico do come from emergency care providers at non-participating facilities, they can also originate from non-emergency care provided by out-of-network health care providers at an otherwise in-network facility.
Next, the law states that surprise bills can no longer be knowingly sent to individuals who are covered by health insurance. Instead, non-participating providers must now submit to cost-sharing amounts that have been put in place by the individual’s insurance company. In addition, these providers and health care organizations are no longer allowed to send these surprise bills to collections when individuals fail to pay. These practices are all subject to high damages under the new law.
Finally, the law states that consumers should be aware of their rights under the Surprise Billing Act. To do this, health care organizations and providers must notify patients that they will not be responsible for charges over and above that which has been approved by their insurance plans for the same in-network amounts. In the case of non-emergency services, a non-participating provider must notify the patient of this fact and should encourage the patient to discuss other options with his health insurance company. Consumers are also now allowed to appeal determinations made by their insurance companies.
New Mexico is not the first state to enact legislation protecting consumers from dangerous and financially difficult surprise bills or balance bills. There are already 25 other states with surprise billing statutes, and there is more interest in similar legislation throughout the country. Today, nine states have comprehensive legislation while more than a dozen have limited legislation. However, as time passes, more states are sure to jump on board with far-reaching protections for their residents.
In addition, the federal government has come on board with promises to look for more transparency from health care organizations and health insurance companies alike. Numerous congressional committees have had hearings regarding bills that have been introduced by both representative and senators. President Trump has also been a solid proponent for this cause, signing an executive order in June 2019 requiring additional transparency on prices for various health care costs at the institutional level. In addition, the American College of Surgeons continues to advocate for federal and state legislation aimed at ridding the industry from surprise bills.
Additional Coverages and Prohibitions
While the laws against surprise billing from non-participating providers and health care organizations was certainly at the heart of this bill, there were several other parts to the act that have wide-ranging consequences for consumers. The following topics were also covered.
Emergency Care Reimbursement
Insurance companies are now required to reimburse emergency health care personnel and facilities for associated costs as long as a layperson would have reasonably assumed that the patient required emergency care. This stops individuals from having to pay on their own if they sought emergency care and were eventually diagnosed with a non-emergent issue.
Non-Emergency Care Reimbursement
Surprise bills are also eliminated when the patient does not have a reasonable opportunity to select an in-network provider at a facility or does not realize that he has been provided with care from an out-of-network provider at an in-network facility. In addition, care is covered when the patient is not able to receive medically necessary care from an in-network facility. However, patients who knowingly accept non-emergent care at an out-of-network facility or from an out-of network provider may still receive balance bills.
Because of the health insurance companies’ arguments regarding reimbursement amounts, rates are currently based on claims that were paid out in 2017, and the law has defined the reimbursement rate as falling in the sixtieth percentile for allowed services in the same sector and geographical area. It also set minimum reimbursement rates.
Help for Every Resident
The new Surprise Billing Act in New Mexico has plenty of positive ramifications for all state residents. Although it mainly applies to those individuals holding health insurance policies, the increase in billing transparency and the crackdown on high charges by certain types of practitioners, such as emergency medicine physicians, will certainly trickle down even to those individuals who are paying privately. Now that health care organizations must be more transparent in their pricing for health care costs at their facilities, consumers are better able to shop around for care and to determine an approximate cost for current and future health care.
The Surprise Billing Act in New Mexico aims to protect consumers from the unexpected bills that often come from specialized physicians as well as out-of-network providers. In particular, the bill seeks to lower surprise medical bills from such specialists as anesthesiologists, emergency medicine physicians, radiologists and pathologists who are the practitioners most likely to bill for inflated charges.
Although this act mainly aims to protect the rights of consumers, it does have several measures in place to allow private insurance companies to continuing controlling a variety of health care costs. Thus, its aim is to allow the insurance industry, medical practitioners and private patients to find the best overall balance in billing and payments while helping consumers feel more prepared for how much their bills will be.