To help inform policymakers as they debate a range of patient protection options, we have identified key considerations for addressing surprise medical bills. These considerations are informed by policies already adopted in more than half of states. One key consideration is ensuring that patients are taken out of the middle of disputes between insurers and health care providers.

NOTE: Congress recently enacted the federal No Surprises Act, a new federal law that protects patients from surprise medical bills in all states. These comprehensive new protections went into effect in 2022 and protects patients from surprise medical bills for emergency services (including air ambulances) and non-emergency services provided at an in-network facility. Patients’ out-of-pocket costs will be limited to the costs they would have paid if they had received services from an in-network doctor, hospital, or other health care provider. The considerations here may continue to be relevant (especially for state policymakers interested in pursuing separate protections) but we recommend that readers learn more about the No Surprises Act here.  

Taking the Patient Out of the Middle

Negotiations over network participation are complex for both insurance companies and health care providers. These entities have significant market power and information to negotiate with one another over reimbursement issues. Patients, on the other hand, do not have these resources and no one would expect them to participate in such negotiations. Yet, too often, patients are pulled into the middle when there is a dispute over payment for an out-of-network service.

There are many reasons to encourage patients to receive in-network health care. In-network care can help hold down health care costs through discounted reimbursement and better coordination of care for people with chronic conditions. At times, patients may make an informed decision to use an out-of-network provider. In those circumstances, the patient may be exposed to a “balance bill” from the provider.

But many patients across the country are receiving surprise medical bills from out-of-network providers without the ability to make an informed, advance decision to use that provider. Many of these bills come from providers the patient could not have reasonably chosen at the time they were treated (such as in an emergency or at an in-network facility that contracts with certain out-of-network clinicians). These medical bills—whether small or large—can be financially devastating for families. This is one reason why unexpected medical bills top the list of health care costs that Americans are afraid they will not be able to afford.

Stakeholders generally agree that patients with insurance should not have to pay additional costs or even receive a bill when treated by an out-of-network provider for reasons outside their control. To hold patients harmless, out-of-network bills must essentially be treated as in-network bills. This means that a patient would be subject only to in-network out-of-pocket costs (like their deductible and any copay or coinsurance).

Policymakers can, however, accomplish this goal differently. Here are some options for holding patients harmless while dividing payment responsibility between the insurance company and the provider.

Hold Patients Harmless Prohibit Providers from Sending Surprise Bills