Surprise medical bills are the target of a new law. Here's how it ...

Other factors, such as the experience of the provider, the type of hospital or the complexity of the treatment, can be considered in some circumstances, but not given equal weight.By contrast, some of the more than a dozen state laws taking aim at surprise bills allow arbitrators to consider higher rates, such as billed charges set by hospitals or doctors, rather than negotiated rates, which potentially drive up spending.One recent study, for example, found that in New Jersey — which has different arbitration rules than what is being set up for the federal program — cases were settled at a median of 5.7 times higher than in-network rates for the same services.Unlike New Jersey, the federal government is specifically barring consideration of the highest amounts — the billed charges — and the lowest payment amounts, including those from Medicaid and Medicare programs."This seems likely to reduce premiums in addition to protecting patients from surprise bills," said Loren Adler, associate director of the University of Southern California-Brookings Schaeffer Initiative for Health Policy, who co-authored the New Jersey study.Still, the law's impact on premiums is open to debate. Instead, they typically have set charges above the level of insurers' reimbursement and have sent surprise bills to patients for the difference.The rule undercuts the incentive to use this business model.It makes it "pretty clear" that hospitals, physicians, air ambulances and other medical professionals "should not count on staying out of network and then trying to use the federal process to capture higher reimbursement," said Keith.Some medical societies and advocacy groups predicted the law could have the opposite effect.Insurers will use the disputes to "drive down payment to the point that it is no longer feasible for many providers to take that, or any insurance," warned Katie Keysor, senior director of economic policy for the American College of Radiology, in an emailed statement.Adler said that argument doesn't fly when looking across the experience of states with similar laws. (Those state rules don't apply to many types of job-based health insurance, but the federal rule will.)"Every single surprise billing debate has done the opposite and pushed more people into the network," he said.Whether a group signs a contract with an insurer may matter less going forward, he said.Once the law takes effect, "it's completely irrelevant whether an emergency room doctor is in network or not," he said.