“Privately insured consumers expect that if they pay premiums and use in-network providers, their insurer will cover the cost of medically necessary care beyond their cost-sharing,” Kevin Lucia, Jack Hoadley and Ashley Williams wrote in a balance billing paper for the Commonwealth Fund in June 2017, analyzing the fragmented state-by-state situation for consumer protections. “However, when obtaining care at emergency departments and in-network hospitals, patients treated by an out-of-network provider may receive an unexpected ‘balance bill’ for an amount beyond what the insurer paid. With no explicit federal protections against balance billing, some states have stepped in to protect consumers from this costly and confusing practice. Goal: To better understand the scope of state laws to protect consumers from balance billing. Methods: Analysis of laws in all 50 states and the District of Columbia and interviews with officials in eight states. Findings and Conclusions: Most states do not have laws that directly protect consumers from balance billing by an out-of-network provider for care delivered in an emergency department or in-network hospital. Of the 21 states offering protections, only six have a comprehensive approach to safeguarding consumers in both settings, and gaps remain even in these states. Because a federal policy solution might prove difficult, states may be better positioned in the short term to protect consumers. Background: Consumers buy private health insurance coverage to protect themselves from the high cost of medical care. They expect that if they pay their premiums and use in-network providers, their insurer will cover the cost of medically necessary care beyond their specified copayments, coinsurance, and deductibles. An in-network provider is a physician, hospital, or other health care provider with whom a health plan has negotiated a payment rate. As part of its contract with the plan and typically required by state law, the in-network provider agrees not to charge the plan or enrollee more than the negotiated rate. By contrast, an out-of-network provider has no contract with the health plan and thus no negotiated payment rate. When an enrollee is treated by an out-of-network provider, the health plan will often limit its payment to an amount that it determines is fair. When this happens, an enrollee may be billed by the out-of-network provider for the difference between what their health plan paid and what the provider charges. In some cases, enrollees face thousands of dollars in charges—referred to as ‘balance bills’ — above their expected cost-sharing.” Kevin Lucia, Jack Hoadley and Ashley Williams, “Balance Billing by Providers — State Consumer Protections,” The Commonwealth Fund.
