Furthering his state’s historic consumer protections against surprise medical bills, New York Governor Andrew Cuomo signed into law this past October the Patient Protection Act, adding additional protections for emergency room visits.
New York was already a bellwether in the field, passing the historic Surprise Medical Bill Act in 2014 to prevent unexpected medical bills from emergency room visits. Under this year’s Patient Protection Act, health insurance companies are now prohibited from charging members who were treated in out-of-network hospitals for emergency visits, as well as inpatient services following the ER visit, more than they would charge patients who remain in-network. This is a significant update from the 2014 Surprise Medical Bill law which regulated the prices of emergency room treatments by out-of-network providers in in-network hospitals by banning balance billing and requiring insurers and physicians to enter into binding arbitration to settle disputed bills.
Now, under the Patient Protection Act, patients are shielded from high medical bills if they visit out-of-network hospitals. In other words, health insurance enrollees won’t have to pay more in out-of-pocket charges, such as coinsurance payments, than the amount they would pay for in-network treatments when they receive emergency treatment at hospitals not in their insurance networks. Akin to the 2014 law, hospital charges for emergency services are subject to the independent dispute resolution process, or arbitration. The law takes effect January 1, 2020.
Notably, the 2014 Surprise Medical Bill Act has had the effect of lowering in-network payments to emergency physicians by over 8% according to a working paper from the National Bureau of Economic Research. By regulating out-of-network providers in in-network hospitals, the 2014 Surprise Medical Bill effectively reduced the price emergency physicians sought from insurers – the NBER concluded that the 2014 Surprise Medical Bill law reduced out-of-network billing by 34%.
While it remains to be seen what the effect of this year’s Patient Protection Act will be, if it’s anything like the Surprise Medical Bill Act, it may foreshadow national legislation. A group of bipartisan U.S. senators introduced a national version of New York’s state arbitration process enshrined in the Surprise Medical Bill Act via the Stopping the Outrageous Practice of Surprise Medical Bills Act of 2019 – also referred to as the STOP Surprise Medical Bills Act of 2019.