By: HUB’s EB Compliance Team

By one estimate, twenty-eight states have some form of “surprise” balance billing protections. While Congress is now actively considering a more comprehensive federal solution, these individual states have provided different legislative frameworks for addressing this problem.

Surprise Bills

So-called “surprise” medical bills are balance bills for provider charges. The provider charges more than the amount paid by the insurance and the “balance” is billed to the individual. Balance bills occur mostly in one of two situations. First, someone enrolled in the coverage receives emergency care out-of-network. Second, they receive non-emergency care at an in-network facility, but one of the providers at the facility is not in-network. (For example, an individual goes to a hospital for surgery only to be billed extra by the anesthesiologist because that doctor is not “in-network.”)   

This second group is most often what is referred to as a “surprise” medical bill because the person receiving the care went to an in-network facility and mistakenly believed they were using only in-network providers.

Surprise medical bills can be a hardship for the employee. The billed charges can be far in excess of the amount paid by the insurance and the provider may be unwilling to negotiate to reduce the charges. Moreover, given that the mix of out-of-network providers administering medical services is sometimes beyond the patient’s direct control, the “surprise” additional financial burden is perceived as particularly unfair.

State Responses

State surprise or balance billing legislation varies, but it tends to include one or more of the following:

  • Requiring the insurer to hold the individual harmless for charges beyond the in-network level of cost-sharing.
  • Prohibiting out-of-network providers from billing beyond the in-network level of cost sharing.
  • Providing some process for the insurer and provider to resolve the dispute. This can include negotiation or binding arbitration.

Sometimes these protections are limited to emergency costs. In other states, they apply more broadly to any balance billing charges. Most of these laws only apply to insurance coverage because a federal law (ERISA) generally constrains state power to regulate self-funded plans. It is notable, however that a few state laws allow self-funded plans to voluntarily “opt-in” to the process.

Employer Responses

Although this landscape is ever shifting, employers should keep a couple points in mind. First, be sure to keep an eye on developments at the federal level and the states in which you operate (HUB will continue to monitor these developments and provide updates). As protections in the states evolve, they will have significant impact on the insurance coverage available in your state.

Second, if an employee comes to you with a balance billing complaint, make sure the employee is in touch with the insurer or third-party administrator. The insurer or third-party administrator may be willing to negotiate with the provider, or may be compelled to do so under an applicable state law. 

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER

The information herein is intended to be educational only and is based on information that is generally available. HUB International makes no representation or warranty as to its accuracy and is not obligated to update the information should it change in the future. The information is not intended to be legal or tax advice. Consult your attorney and/or professional advisor as to your organization’s specific circumstances and legal, tax or other requirements.