Economic Alliance for Michigan
Michigan’s Surprise Billing Law Saving Healthcare Dollars
The Economic Alliance for Michigan (EAM) released a study reviewing the effectiveness of Michigan’s surprise billing law. Surprise medical billing occurs when the patient was seeking service at an in-network facility, but the staff within was out-of-network. Initial findings suggest Michigan’s surprise billing law is successful in curbing unexpected financial woes due to healthcare costs.
Michigan’s comprehensive surprise billing law was implemented in 2020. Regulated by the Michigan Department of Insurance and Financial Services (DIFS), the law mandates that healthcare providers inform patients about the possibility of surprise billing. In addition, the patient also receives a good faith estimate of the total cost of care.
Michigan’s surprise billing law also allows for a dispute resolution process. These disputes are settled through binding arbitration, which is negotiated by the provider and insurance company and does not directly involve the patient. The study highlighted the following statistics:
- In 2022, ambulance services topped the list of most filed complaints in the state, followed by emergency and laboratory services.
- 187 complaints were filed between October 2020 and December 2023.
- Between October 2020 and December 2023, only one case proceeding to arbitration.
In 2022, the federal No Surprises Act (NSA) was implemented to provide transparency requirements and protections from balance billing for most out-of-network emergency services, cost sharing, and non-emergency services. From 2022 to 2023, Michigan ranked 17th out of twenty-two
states for the smallest number of arbitrations submitted at the federal level, compared to other states with state and federal surprise bill laws.
“Surprise billing policies have prevented surprise bills and increased the number of in-network providers for many private and employer-sponsored insurance plans, saving thousands of dollars in healthcare cost for consumers and employers,” said Bret Jackson, president and CEO of EAM. “The Michigan law has protected patients and kept costs down for consumers and purchasers. This is in sharp contrast to the federal No Surprises Act that is increasing prices for all through the federal arbitration process.”
The study suggests that the success of Michigan’s surprise billing law is due to the hybrid approach for out-of-network disputes, clear guidelines on which complaints can be submitted for arbitration, and distinct rules around price negotiations when applicable. As a result there has been an increase with in-network providers and the law has led to fewer out-of-network claims and surprise medical bills – ultimately helping to reduce healthcare costs for Michigan residents.