Scope of Protections

States can only regulate fully insured individual and group health insurance products. However, state insurance law does not apply to most types of health insurance offered by employers. This means that most patients are not protected from state laws prohibiting surprise medical bills. As a result, state laws on surprise medical bills can only go so far, and federal protections are needed to fill this gap.

Policymakers should also consider how surprise billing protections will apply to different types of health care plans.  While some states apply their laws only to certain types of health care plans, the most comprehensive protections apply equally to all types of plans (including health maintenance organizations (HMOs), preferred provider organizations (PPOs), and any other type of managed care plan).

Policymakers should also consider whether health insurers are meeting state and federal network adequacy standards. Network adequacy and surprise billing protections are separate but related issues, and both have implications for premiums and market dynamics between insurers and providers. Some states, for instance, protect patients from surprise medical bills when networks are inadequate, in-network providers are not available, and the patient must then see an out-of-network provider.

Policymakers typically apply surprise bill protections to a range of health care settings where bills arise. The most comprehensive protections would apply to both emergency and non-emergency situations.

Emergency Situations

The most comprehensive protections apply for services rendered for the duration of a health care emergency (from the ambulance ride to safe transfer to an in-network facility) and regardless of the type of facility (whether a hospital emergency room or a free-standing emergency room). In these situations, the consumer would be protected from bills from the facility providing the services and from all types of providers who deliver services during the emergency episode.  

Surprise bills from ambulances—both ground and air ambulances—present unique issues for policymakers. One study found that 71% of all ambulance rides (both ground and air) involved potential surprise bills. Few states have tried to limit or prohibit surprise billing by ground ambulances, in part because many are owned and managed by municipalities that depend on the revenue they provide. Federal aviation law restricts the ability of states to regulate air ambulance prices. Attempts by states to prohibit surprise bills by air ambulance companies have been challenged in federal court. Congress recently prohibited surprise air ambulance bills in the federal No Surprises Act. Learn more about air ambulances here.

Provider Types and Services for Non-Emergencies

Patients may face surprise medical bills in an in-network hospital or other facility where a patient is treated by an out-of-network provider (such as an anesthesiologist, radiologist, or pathologist) that the patient had no control selecting. These services may be limited to only certain types of providers, such as hospital-based providers (radiologists, anesthesiologists, pathologists, and hospitalists), or they may include a broader array of specialists (neonatologists, cardiologists, etc.). Policymakers can consider whether these protections should be waived if, for instance, the patient is notified and agrees that a bill may be sent by a specific provider.