COVID-19, Health System Distortions, and Surprise Medical Bills: Congress Must Act Now

By Natasha Kumar and Jane Sheehan

The growing burden of the COVID-19 pandemic has revealed fundamental cracks in our health care system that we have accepted for far too long. It is well-documented that millions of Americans lack comprehensive health coverage and access to affordable care, and thousands of families in the United States forgo medical care due to cost.[1],[2],[3],[4] A recent nationwide Bankrate survey found that nearly one in three American families have skipped medical care because of cost in the past 12 months alone.[5]

Now we find ourselves eight months into a global health crisis that has caused the biggest financial downturn in generations, and Americans continue to pay far too much for health insurance that often fails them when they need it most. Congress has passed several bills to address the crisis, but it has not included provisions that would ensure comprehensive health insurance or protect patients when their coverage doesn’t pay for necessary care. In fact, Congress is currently sitting on bipartisan solutions that would address egregious health system flaws such as surprise medical billing, leaving more families at risk every day that passes without action.

At a time when the pandemic has caused widespread economic devastation, Congress should make it a top priority to pass legislation that protects constituents in every district while lowering health care spending.

Many Americans Have Received Unexpected Medical Bills for COVID-19 Treatment

Since the onset of the COVID-19 pandemic, people across the country have come forward with stories of being charged ludicrous amounts for basic medical care despite the fact that they are insured and seek care from providers who are in-network.

Stories like that of Osmel from Miami, who sought care for flu-like symptoms and was slapped with a bill of $3,270 – more than twice what the hospital told him he would owe[6] – are far too common.

Timothy from Colorado experienced COVID-19 symptoms and went to his local emergency department (ED), where he received a chest X-ray, an electrocardiogram, and was prescribed an inhaler. He was billed $3,278, and his insurer covered only about a third of the bill, despite the fact that he verified in advance that the ED was in his network.[7]

And there are stories like that of Andrew from Vermont, who sought medical attention from his physician after experiencing fever, malaise and difficulty breathing. After testing negative for the flu and other viruses, he received a call from an infectious disease department asking him to report to the ED for a COVID-19 test. He had already met his deductible and assumed his care would be covered. Instead, he found out that the ED physician who saw him was staffed from an out-of-network provider service, leaving him with surprise medical bills totaling close to $2,000. [8]

These stories are not isolated events. A Kaiser Family Foundation analysis found that COVID-19 patients with complications or other illnesses can face treatment costs of over $20,000. They also found that out-of-pocket costs for all patients admitted for COVID-19 treatment, regardless of their health status, would regularly exceed $1,300.[9]

Prior to the COVID-19 pandemic, surprise medical bills plagued consumers for decades. Recent studies estimated that nearly one in five ED visits resulted in out-of-network charges, and more than one in five claims for lab services provided at in-network hospitals were billed as out-of-network.[10], [11]

Now, it is likely that consumers will be hit even harder by surprise bills as families are pushed to out-of-network facilities for health emergencies or routine care because hospitals and other providers are being overwhelmed by COVID-19 patients.[12] And this comes in the context of an economy where a staggering 120 million adults, or 48% of all U.S. residents over the age of 18, have lost employment income since mid-March and simply cannot afford a surprise medical bill.[13]

Congress Must Act to Protect Patients from Surprise Medical Bills

So, what can Congress do to address this problem? In 2019, Congress examined surprise billing practices, which resulted in a bipartisan, bicameral legislative solution known as the Lower Health Care Costs Act.[14] This proposal would provide comprehensive consumer protections; improved transparency around health care quality and costs; and a fair, market-based reimbursement methodology. By addressing some of the most damaging flaws in our health care system, the Lower Health Care Costs Act would help reduce health care costs and improve health care quality for all. Yet, despite bipartisan support and the expressed interest of the Trump administration, lawmakers were unable to pass comprehensive protections before the onset of the COVID-19 pandemic.

This May, in the absence of legislation to curb this practice altogether, the federal government took limited steps to prevent specific instances of surprise billing related to COVID-19. Federal guidelines that were contained in the Families First Coronavirus Response Act and the Coronavirus Aid, Relief and Economic Security (CARES) Act require insurers to cover the cost of appointments (including cost-sharing) when providers order or administer COVID-19 tests.[15] Additional HHS guidance states that patients who are considered “at risk” for COVID-19 should be safe from surprise medical bills. However, there is still no consensus on how this guidance would be enforced, and these protections would apply only to patients who seek care from health care facilities that have received financial support through the recently enacted Provider Relief Fund. [16], [17]

Unfortunately, this leaves gaping holes that keep patients on the hook for extremely high bills. HHS agrees that a federal legislative solution is needed to permanently protect consumers.[18] If patients seek care for COVID-19-related symptoms and do not receive a COVID-19 test, they could face unexpected bills. This fact, coupled with the national shortage of COVID-19 tests, [19] shows that current measures are nowhere near enough to protect patients from high bills. Furthermore, none of these measures does anything to help people who seek medical care for situations unrelated to COVID-19, such as car accidents, cancer treatments or childbirth.

Conclusion

To respond to the pandemic and the widespread economic devastation it has caused, Congress should prioritize passing legislation that protects constituents in every district while lowering health care spending. The next coronavirus stimulus package presents an opportunity for ending this nightmare for thousands upon thousands of patients across the country. With the White House on board[20], [21] and a bipartisan deal in hand, Congress has all the pieces in place to finally pass a legislative solution that will end this practice during the pandemic and beyond.[22]

Endnotes

[1] Lydia Saad, “More Americans Delaying Medical Treatment Due to Cost,” Gallup, December 9, 2019, https://news.gallup.com/poll/269138/americans-delaying-medical-treatment-due-cost.aspx.

[2] Bruce Japsen, “Poll: 44% of Americans Skip Doctor Visits because of Cost,” Forbes, March 26, 2018, https://www.forbes.com/sites/brucejapsen/2018/03/26/poll-44-of-americans-skip-doctor-visits-due-to-cost/ – 55d9b3e26f57.

[3] Shawn M. Carter, “Over Half of Americans Delay or Don’t Get Health Care because They Can’t Afford It—These 3 Treatments Get Put Off Most,” CNBC, November 29, 2018, https://www.cnbc.com/2018/11/29/over-half-of-americans-delay-health-care-becasue-they-cant-afford-it.html.

[4] Elisabeth Rosenthal, “How the High Cost of Medical Care Is Affecting Americans,” The New York Times, December 18, 2014, https://www.nytimes.com/interactive/2014/12/18/health/cost-of-health-care-poll.html.

[5] Sarah Foster, “Survey: As Coronavirus Spreads, Nearly 1 in 3 Americans Admit to Not Seeking Medical Care Due to Cost,” Bankrate, March 12, 2020, https://www.bankrate.com/surveys/health-care-costs/.

[6] Ben Conarck, “A Miami Man Who Flew to China Worried He Might Have Coronavirus. He May Owe Thousands,” Miami Herald, February 24, 2020, https://www.miamiherald.com/news/health-care/article240476806.html?mod=article_inline.

[7] Phil Galewitz, “COVID-Like Cough Sent Him to ER—Where He Got a $3,278 Bill,” Kaiser Health News, May 25, 2020, https://khn.org/news/covid-like-cough-covid19-symptoms-emergency-room-billing-code-surprise-medical-bill/.

[8] Emmarie Huetteman and Elisabeth Rosenthal, “He Got Tested for Coronavirus. Then Came the Flood of Medical Bills,” The New York Times, March 30, 2020, https://www.nytimes.com/2020/03/30/opinion/coronavirus-test-cost-bill.html?auth=login-email&login=email.

[9] Gary Claxton, Cynthia Cox, Nisha Kurani, Daniel McDermott, and Matthew Rae, “Potential Costs of COVID-19 Treatment for People with Employer Coverage,” Peterson-KFF Health System Tracker, March 13, 2020, https://www.healthsystemtracker.org/brief/potential-costs-of-coronavirus-treatment-for-people-with-employer-coverage/.

[10] Elena Renkin, “Study: 1 In 5 Patients Gets A Surprise Medical Bill After Surgery,” National Public Radio, February 11, 2020, https://www.npr.org/sections/health-shots/2020/02/11/804906330/study-1-in-5-patients-gets-a-surprise-medical-bill-after-surgery.

[11] Kevin Kennedy, Bill Johnson, and Jean Fuglesten Biniek, “Surprise Out-of-Network Medical Bills during In-Network Hospital Admissions Varied by State and Medical Specialty, 2016,” Health Care Cost Institute, March 28, 2019, https://www.healthcostinstitute.org/blog/entry/oon-physician-bills-at-in-network-hospitals.

[12] Elizabeth Rosenthal and Emmarie Huetteman, “Analysis: He Got Tested for Coronavirus. Then Came the Flood of Medical Bills,” Kaiser Health News, April 1, 2020, https://khn.org/news/covid19- coronavirus-test-surprise-medical-bill/.

[13] U.S. Census Bureau, “Employment Table 1. Experienced and Expected Loss of Employment Income, by Select Characteristics: United States,” Household Pulse Survey: May 14–19, 2020, May 27, 2020, https://www.census.gov/data/tables/2020/demo/hhp/hhp3.html.

[14] U.S. Congress, Senate. Committee on Health, Education, Labor and Pensions, Lower Health Care Costs Act bill summary, 116th Cong., 2nd session, 2019, https://www.help.senate.gov/imo/media/doc/LHCC%20Section-by-Section_FINAL.pdf.

[15] Centers for Medicaid and Medicare Services, “FAQs about Families First Coronavirus Response Act and Coronavirus Aid, Relief, and Economic Security Act Implementation Part 42,” Centers for Medicare and Medicaid Services, April 11, 2020, https://www.cms.gov/files/document/FFCRA-Part-42-FAQs.pdf.

[16]  Carmen Heredia Rodriguez, “COVID-19 Tests That Are Supposed to Be Free Can Ring Up Surprising Charges,” National Public Radio, April 29, 2020, https://www.npr.org/sections/health-shots/2020/04/29/847450671/covid-19-tests-that-are-supposed-to-be-free-can-ring-up-surprising-charges.

[17] Emmarie Huetteman, “In Fine Print, HHS Appears to Ban All Surprise Billing During the Pandemic,” Kaiser Health News, April 17, 2020, https://khn.org/news/in-fine-print-hhs-appears-to-ban-all-surprise-billing-during-the-pandemic/.

[18] Office of the Assistant Secretary for Planning and Evaluation, “HHS Secretary’s Report on: Addressing Surprise Medical Billing,” U.S. Department of Health & Human Services, July 29, 2020, https://aspe.hhs.gov/system/files/pdf/263871/ASPE_Surprise_Billing_Report%20_2020.07.29.pdf.

[19] Manny Fernandez and Sarah Mervosh, “Months into Virus Crisis, US Cities Still Lack Testing Capacity,” The New York Times, July 15, 2020, https://www.nytimes.com/2020/07/06/us/coronavirus-test-shortage.html.

[20] Susannah Luthi and Rachel Roubein, “White House Bids for ‘Surprise’ Billing Fix ahead of Next Rescue Package,” Politico, May 27, 2020, https://www.politico.com/news/2020/05/27/white-house-surprise-billing-healthcare-coronavirus-rescue-285780.

[21]Office of the Assistant Secretary for Planning and Evaluation, “HHS Secretary’s Report on: Addressing Surprise Medical Billing,” U.S. Department of Health & Human Services, July 29, 2020, https://aspe.hhs.gov/system/files/pdf/263871/ASPE_Surprise_Billing_Report%20_2020.07.29.pdf.