The United States spends nearly $4.3 trillion dollars a year on health care, the highest sum of any developed country. In 2021, this averaged about $12,900 per person, which is nearly double the average per capita spending of comparable nations. Interestingly, these inflated costs are not indicative of higher health system utilization and do not correlate with superior care or better outcomes. In fact, Americans have one of the lowest life expectancies in the developed world, and data shows that sick consumers routinely avoid seeking necessary medical services because they cannot afford the associated out-of-pocket costs. Sadly, our nation’s excessive healthcare spending is a result of endemic costs that are baked into the American healthcare system. Administrative costs and corporate greed drive up the price of healthcare services, leaving many patients to choose between their health and their financial well-being.
To combat the high cost of care, insurers use different tactics to keep their costs low for consumers and to stay competitive in the largely privatized market. To reduce patient costs, health plans contract with providers and hospitals to maintain low premiums for consumers. In the process of contracting, insurers seek out doctors and hospitals who agree to accept lower payments per patient in return for an expected greater total number of patients. As a result, narrow “networks” are created that exclude higher-priced providers from the health plan.
When patients receive medical services outside of their limited pre-approved network of providers and facilities, the health insurer usually refuses to cover the full cost of the services rendered. In this situation, the insurer may agree to cover only a small portion of the cost, but generally, the patient is stuck with the balance, and in turn receives a surprise medical bill. The byproduct of this health model is to encourage patients to shop around for care and diligently select only “in-network” providers so consumer costs can remain low. However, careful provider or facility selection is “impractical, if not impossible, for patients in dire need of emergency care.” Take the patient who was treated at an out-of-network hospital after he collapsed from a heart attack, only to be handed a bill for over $108,000, or the patient who was billed over $200,000 after he crashed during a bicycle race and was treated by a team of out-of-network providers. The Internet is riddled with stories like these, showcasing Americans from all walks of life who, after receiving unexpected life-saving care, are plagued with crushing bills.
Since surprise billing is legal, at least to some extent in most states, patients blindsided with medical debt have had very limited modes of redress. Attorneys have historically hesitated to bring surprise billing claims arising from insurer or providers’ procedural or contractual billing errors because attorneys’ fees are not guaranteed. And because most surprise bills are issued legally, for many patients the only way out from under the crippling financial weight of an unexpected medical bill is bankruptcy.
In 2021, the federal government implemented the No Surprises Act (“NSA”), which sought to provide patients with protections against surprise medical billing and establish resolution processes for the payment of unexpected bills that arise from out-of-network services. However, as this Note will explore, the law leaves significant gaps in patient protections and bestows insurers with immense financial power over providers.