What Is Balance Billing and Are There Legal Protections?

Am I Protected Against Balance Billing

Patients' vulnerability to surprise medical bills arising from out-of-network treatment varies from state to state

Alamy One in seven patients admitted to a hospital in their health plan's network get an unexpected bill from an out-of-network medical provider, according to
occurs when you receive treatment from a medical professional or facility that is outside your health plan's network and charges you the difference between their full fee and what insurance pays — something an in-network practitioner cannot do. Even if you are at a hospital that is in your network, you might be seen by a doctor who is not, particularly in an emergency when you may have little or no control over who handles your care. With many health plans narrowing their provider networks, and specialist practices consolidating into larger groups with more power to refuse insurers’ negotiated rates, patients are more likely to find themselves being treated by out-of-network physicians, especially in emergency cases. This means more surprise bills. In the past decade, balance billing has become the most frequent subject of complaints to many states’ insurance regulators, says Loren Adler, associate director at the Center for Health Policy at the Brookings Institution, a Washington, D.C., think tank. Federal programs such as Medicaid and Medicare effectively ban balance billing by creating their own networks and limiting the amounts they pay to providers. But there are no such national protections for people with private insurance, including those who get coverage through Affordable Care Act exchanges.
Even state laws restricting balance billing have limited reach. The federal Employee Retirement Income Security Act, or ERISA — a 1974 law that sets guidelines for pension, retirement and health plans in the private sector — exempts so-called self-funded plans operated by private companies from most state insurance laws. Those plans, in which companies use their own money to pay for employees’ medical services rather than purchasing insurance, cover around 61 percent of people with workplace health coverage. “It’s a huge hole in state laws that self-funded plans can’t be covered,” says Kevin Lucia, a research professor at Georgetown University’s Health Policy Institute and co-author of a comprehensive on state regulations on balance billing.

Which states protect consumers

Still, state statutes offer some relief to many patients. About half of the 25 state laws on the books as of December 2018 prohibit providers from issuing balance bills in most or all circumstances. Nine of them — California, Connecticut, Florida, Illinois, Maryland, New Hampshire, New Jersey, New York and Oregon — provide what the Commonwealth Fund terms “comprehensive” protection, meaning they: cover all emergency care and in-network non-emergency care; apply to all types of insurance, including preferred provider organizations (PPOs) and health maintenance organizations (HMOs); prohibit balance billing and hold consumers harmless from extra charges by medical providers; and establish a method to determine payment. This could be setting a payment standard (based, for example, on what Medicare charges for a service, or on the usual and customary fee in a given region) or requiring arbitration-style dispute resolution between insurers and providers. About half of the 25 state balance-billing laws on the books prohibit providers from issuing balance bills in most or all circumstances. Though these laws do not cover a state’s entire insured population due to the ERISA restrictions, some have proven effective at reducing surprise bills. For example, New York’s law, enacted in 2014, has curtailed out-of-network billing by 34 percent, according to the National Bureau of Economic Research. Sixteen states offer lesser protections — for example, some limit balance-billing prohibitions to ER treatment by out-of-network doctors, don't cover PPOs or don't set out a payment method. Those states are: Arizona Colorado Delaware Indiana Iowa Maine Massachusetts Minnesota Mississippi New Mexico North Carolina Pennsylvania Rhode Island Texas Vermont West Virginia Provisions vary widely from state to state. For details on balance-billing regulations where you live, contact your If you live in one of the other 25 states or the District of Columbia, watch your legislatures; they may be considering a balance-billing measure. You can also contact the state insurance department to learn about your rights and options. In the meantime, you still have potential remedies for medical-billing problems, Adler says. He suggests: calling the doctor or medical facility to . asking your insurance company to cover all or part of the out-of-network cost. filing a complaint with your state’s insurance department or . If all else fails, Adler says, consumers “can contact the media and hope a reporter will publicize their case.” Cancel You are leaving AARP.org and going to the website of our trusted provider. The provider’s terms, conditions and policies apply. Please return to AARP.org to learn more about other benefits. Your email address is now confirmed. You'll start receiving the latest news, benefits, events, and programs related to AARP's mission to empower people to choose how they live as they age. You can also by updating your account at anytime. You will be asked to register or log in. Cancel Offer Details Disclosures

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