On Super Bowl Sunday my son managed, in that mysterious preteen boy way, to break his leg while snow sledding. We went to the emergency department and received good, straightforward care. His leg was splinted and his pain was controlled in time for kickoff. He’s healing up nicely.

But now my family has a pendulum swinging over its head. Will we get a bill that is as straightforward as his care was, or will we get a set of “out-of-network” bills, even though the emergency department we went to was considered “in network” (we checked)?

This is no hypothetical threat. Hundreds of thousands of Americans get stuck with out-of-network bills from emergency departments, often for tens or even hundreds of thousands of dollars, because of a sinister business model being advanced by private equity firms. Those firms have twisted this quirk of American medicine, where a doctor working in an in-network hospital can be considered out of network, into a profitable business model in which they buy physician groups and intentionally move the providers out of network. It’s exasperating not only for its shadiness, but for the fact that the out of network doctors often charge rates far above what insurance companies are willing to pay. And it works: as many as one in five ER visits have surprise bills attached to them.

But late in 2020 Congress did something that seems like an obvious bipartisan win for everyone involved, but which was kept from happening for a depressingly long time by lobbying from those same private equity firms: they banned surprise medical billing. Some are calling it “Sarah Kliff’s Law,” after the former Vox, now New York Times, reporter who asked people to send her outrageous examples of this kind of behavior over the last few years.

The law requires insurers and medical providers who cannot agree on a payment to, instead of just mailing out outrageous bills destined to be sent to collection agencies, use an outside arbiter to settle on a fair fee. The fee is based mostly on typical payments for similar services. Then the patients can be charged the same cost-sharing they would have paid for in-network services, and no more. The most powerful effect of the law may be in avoiding arbitration altogether; the New York Times reported last winter that, in the dozen or so states that have set up their own arbitration systems like this prior to Sarah Kliff’s law, most price disputes get successfully negotiated before an arbitrator is even involved.

The law is not perfect. It doesn’t take effect until 2022. And while it will apply to doctors, hospitals, and air transport (which can generate particularly huge bills), it excludes ground ambulances even though a majority of ambulance rides nationwide generates an out-of-network bill. Sarah Kliff herself reported that the omission was due to lawmakers’ fear that untangling the complex local and federal regulations around ambulance services would have delayed or killed the entire bill. If you’re an optimist, you’ll predict that Congress will take up the ambulance issue separately in the future. If you’re a pessimist, you’ll predict that private equity firms will simply move their money away from ER physician groups and toward ambulance services.

Learn more about this kind of skullduggery and what you can do to fight it in the KBGH Book Club.

As the Medical Director of the Kansas Business Group on Health I’m sometimes asked to weigh in on hot topics that might affect employers or employees. This is a reprint of a blog post from KBGH.