May 6, 2019

The terms “surprise” or “balance” billing typically refer to situations in which patients—either unbeknownst to them or absent an affirmative choice by them—receive out-of-network (OON) care or treatment from an OON physician or provider at an otherwise in-network facility and then are billed at OON rates. The surprise charges, representing the difference between what the patient’s insurer paid and the non-discounted “list” rate charged by the provider, often are well above (in fact, multiples of) in-network or Medicare reimbursement rates for the same services.

State approaches to balance billing protections vary with respect to the scope of the protections and associated prohibitions, the types of plans covered and market participants affected, and other applicable obligations (e.g., determinations of provider payment and disclosure/transparency requirements).

A study conducted by the Commonwealth Fund established a set of standards to identify “comprehensive” approaches to balance billing as compared to more piecemeal approaches. Under the study, to qualify as “comprehensive,” a state’s approach to balance billing must:

  • Extend protections to both emergency service and non-emergency services (i.e., apply to both emergency and in-network hospital settings)
  • Apply to all types of insurance, including both HMOs and PPOs
  • Protect consumers by holding them harmless from extra provider charges (i.e., ensuring that consumers are not responsible for the charges beyond the applicable cost-sharing under their insurance plans) and/or outright prohibiting providers from balance billing
  • Adopt an adequate payment standard/method to determine how much the insurer owes the provider or a dispute-resolution process to resolve payment disputes between providers and insurers

This survey, prepared by our legal team at Steptoe & Johnson, utilizes this framework to distinguish between states that have adopted comprehensive models—including California, Connecticut, Florida, Illinois, Maryland, New Hampshire, New Jersey, New Mexico, New York, and Oregon—and those that have taken a more segmented approach—including Arizona, Colorado, Delaware, Indiana, Iowa, Maine, Massachusetts, Minnesota, Mississippi, Missouri, North Carolina, Pennsylvania, Rhode Island, Texas, and West Virginia.

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