Unexpected medical bills can happen when patients receive care from providers or facilities that don’t participate in their health plan. These are called Out of Network providers.
Beginning January 1, 2022, the No Surprises Act protects you from unforeseen balance bills for emergency care and certain scheduled services with out-of-network providers (except air ambulance). However, a provider may ask you to waive these protections through a notice and consent process.
Know Your Limits
The costs associated with out-of-network care can quickly become unmanageable, even for health insurance consumers. Health plans typically cover only a percentage of out-of-network charges, and patients must pay their coinsurance or deductibles and any remaining balance owed to providers.
Sometimes, health plans may negotiate a discount with an out-of-network provider to make out-of-network billing done right. This can help lower the balance billed amount, but more is needed to avoid high costs. If the total bill exceeds your plan covers, you’ll be left with the difference – “balance billing.”
This is why some states have passed legislation to protect consumers from surprise medical bills. For example, the “No Surprises” law bans balance billing for emergency and certain non-emergency services provided by an out-of-network provider or facility unless the patient receives notice of the charge (including the cost) at least 72 hours in advance of receiving the service and the patient has had a meaningful opportunity to choose in-network care. In addition to limiting balance billing, the law requires insurers to provide clearer explanations of consumer benefits and limits. This helps consumers understand their coverage, including how much they may owe after applying coinsurance or deductibles, and it provides transparency for physicians and patients. As the law continues to be implemented, these improvements should further reduce the incidence of surprise medical billing and related financial distress for consumers.
Know Your Rights
Many states have adopted protections that help consumers resolve out-of-network billing issues. These state protections and new federal legislation have helped reduce surprise medical bills. A key part of the new federal legislation prohibits balance billing for any service received in an in-network hospital or ambulatory surgical facility, including inpatient services that follow an emergency room visit. Federal law also requires that a health plan pay an out-of-network provider the same amount as an in-network provider for the same service. It prohibits providers from charging patients above their copayment, coinsurance, or deductible.
It also prohibits providers from requiring patients to sign a written waiver of their rights to receive care in-network. After receiving notice and a consent form establishes that a patient can only be held responsible for applicable out-of-network cost-sharing requirements (i.e., copayments, coinsurance, and deductibles).
In addition, the law establishes a process by which patients can dispute the health plan’s payment through an independent dispute resolution procedure. These provisions will significantly broaden patients’ ability to resolve surprise out-of-network bill issues, and they will also increase the incentive for physicians to agree to a negotiated settlement with a health plan rather than take a patient to arbitration.
Know Your Options
You might choose to get care outside your health insurance provider network for many reasons — whether it’s due to necessity, an emergency, or an inability to find in-network providers for a particular condition. But that increases your risk of being billed too much for out-of-network care, especially if you’re unaware of or don’t understand the complexities of your coverage and how it works.
For example, an insurer may have different networks for its small group and individual/family (self-purchased) plans or use a separate network for Medicare Advantage plans. And some providers are in the networks for multiple insurers but not others, depending on their contract with each insurer and whether they offer services to small groups, individuals, or both.
Insurers must maintain adequate networks based on factors like distance and time, but the specifics vary by state. And while the Affordable Care Act limits out-of-pocket costs for in-network emergency care,13 balance billing is still legal for providers who aren’t in your health plan’s network and don’t agree to a negotiated fee with your insurance provider.
Some States have adopted certain protections against balance billing,14, but additional efforts are needed to ensure consumers fully understand their coverage and how it works. To learn more, read the HPC’s Policy Brief, “Out-of-Network Billing: Concerns Which May Need to Be Further Addressed.” And remember: your best defense against surprise medical bills is to stay within your health plan network whenever possible.
Know Your Options for Payment
For patients with private job-based or individually purchased health insurance, it is common to need care from out-of-network (OON) providers. OON providers do not contract the insurer to agree to a discounted service payment rate. Instead, they may submit a claim to the insurer for the full amount of their charges. This process is known as “balance billing.”
While the law includes certain protections for consumers regarding out-of-network costs and surprises, several important issues remain, including:
The OON cost issue also has implications for the functioning of the overall healthcare market. For example, theories suggest that for-profit hospitals are more likely to employ physicians who bill out-of-network. In contrast, non-profit and government hospitals are less likely to do so. The OON cost issue also disproportionately impacts rural and low-income patients, who are often the least able to afford out-of-network care.