The Biden administration on Thursday put final touches on consumer protections against so-called “surprise” medical bills. The ban on charges that hit insured patients at some of life’s most vulnerable moments will take effect Jan. 1.

Patients will no longer have to worry about getting a huge bill following a medical crisis if the closest hospital emergency room happened to have been outside their insurance plan’s provider network. They’ll also be protected from unexpected charges if an out-of-network clinician takes part in a surgery or procedure conducted at an in-network hospital.

The rules released Thursday detail a key part of the new system: a behind-the-scenes dispute resolution process that hospitals, doctors and insurers will use to haggle over fees. When an insurer and a service provider disagree over fair payment, either side can initiate a 30-day negotiation process. If they still can’t come to an agreement, they can take the matter to an independent arbitrator.

There’s also a new way for uninsured people and certain patients who pay their own way to get an estimate of charges following an emergency procedure.

“We’re hoping to give folks a sigh of relief, who have been blindsided by billing,” said Health and Human Services Secretary Xavier Becerra.

Surprise medical bills have been a common problem for people with health insurance, all the more irritating because most patients might have thought they were protected. Charges running from hundreds to tens of thousands of dollars came from doctors and hospitals outside the network of patients’ health insurance plans. It’s estimated that about 1 in 5 emergency visits and 1 in 6 inpatient admissions triggered a surprise bill.

Although many states already have curbs on surprise billing, federal action was needed to protect patients covered by large employer plans, which are regulated at the national level. A 2020 law signed by then-President Donald Trump laid out a bipartisan strategy for resolving the issue, and the Biden administration filled in critical details.

The idea was to take patients and their families out of the financial equation by limiting what they can be billed for out-of-network services to a fee that’s based on in-network charges. That amount gets counted toward their in-network annual deductible.

The new protections are aimed at:

— Protecting patients from surprise bills arising from emergency medical care. Protections apply if the patient is seen at an out-of-network facility, or if they are treated by an out-of-network clinician at an in-network hospital. In either case, the patient can only be billed based on their plan’s in-network rate.

— Protecting patients admitted to an in-network hospital for a planned procedure when an out-of-network clinician gets involved and submits a bill.

— Requiring out-of-network service providers to give patients 72-hour notice of their estimated charges. Patients would have to agree to receive out-of-network care for the hospital or doctor to then bill them.

Before the ban on surprise billing, patients usually had to take the initiative themselves to work out unexpected charges. In many cases the hospital or doctor would go back and forth with the insurance company until they reached an agreement. But there was no guarantee that would happen, and patients were at risk of being placed into collection proceedings in situations they had no control over.

(AP)