By Ashley Noble
Imagine that you are the ideal health care consumer. You know you need a knee replacement. You search through your insurance carrier’s list of in-network hospitals. You compare prices among providers. You even go the extra mile to make sure the surgeon you want is in-network and schedule the surgery. All goes well during the procedure and you are sent home to recover.
Then, one day you receive a surprise in the mail. It’s a bill from a physician who was brought in to consult on your surgery. The physician is not a member of your insurance carrier’s network, so the physician’s fees have not been completely covered—and now you are on the hook for the difference.
Sound crazy? The practice of a provider billing a patient for the difference between what they received in reimbursement from an insurance carrier and what they actually charge for their services is known as balance billing, or a surprise bill, and it’s not uncommon.
The Commonwealth Fund recently released an issue brief examining state responses to such billing practices. The authors found 21 states have laws on the books that provide some amount of consumer protection from balance and surprise bills in emergency departments and in-network hospitals. Of these states, The Commonwealth Fund identified six states with “comprehensive protections,” including California, Connecticut, Florida, Illinois, Maryland and New York.
State laws vary in their scope. For example, some states may ban providers from “balance billing” altogether, as is the case in Florida. Other states have implemented dispute resolution requirements, such as arbitration procedures, in the event of a balance billing dispute between a provider and a patient.
Other states do not ban the practice of balance billing outright, but instead have passed laws to hold patients harmless in the event of receiving such bills.
Montana enacted such a law in April 2017 for balance bills arising from air ambulance services. Such laws reflect the unique circumstances of states that have populations spread out over large, often isolated, rural areas with inconsistent access to health care services.
During an emergency, it isn’t reasonable to expect people to ensure that the ambulance service that will be transporting them to a hospital emergency department is a provider within their insurance carrier’s network. This is particularly so when the nearest ER may be hundreds of miles away.
At least 89 bills have been introduced in 28 states since 2016 related to this bipartisan, cross-cutting issue. Nine of these have been enacted or adopted in seven state legislatures. The bills range in purpose from encouraging greater transparency to banning the use of balance or surprise billing practices altogether. Louisiana enacted a law requiring hospitals to inform patients prior to receiving care that out-of-network providers may be used during the course of care.
Given the lack of federal law to address these sorts of billing practices, states are leading the way to ensure that America’s health care system is affordable, accessible, and transparent. States have many options to protect consumers while ensuring that providers receive fair compensation for their services. “Hold harmless” and balance billing-ban laws are but examples of such tools.
Ashley Noble is a policy specialist in NCSL's Health program.