By Sandy Ahn, Jack Hoadley and Sabrina Corlette

Florida has become the latest state to enact legislation protecting consumers from unexpected medical bills, often referred to as surprise balance bills. As we found in a report and blog funded by the Robert Wood Johnson Foundation, approximately one-fourth of all states have enacted laws that attempt to protect consumers from surprise bills. However, these states have varying approaches to protecting consumers, with varying degrees of effectiveness. For some states, the protection is limited to reasonable advance notice for the consumer that they might receive services from an out-of-network physician while they are at an in-network facility. In other states, such as Colorado, the protection is stronger and requires health plans to hold the consumer harmless, meaning that the health plan is responsible for paying the surprise bill, no matter how high the charge. In other states, protections from surprise balance bills are only available to people enrolled in certain types of plans. For example, until recently, Florida’s law only protected consumers enrolled in health maintenance organizations (HMOs).

What is surprise balance billing?

Surprise bills can occur when a patient is unaware that they are receiving treatment from a medical provider that is not covered under his or her health insurance plan (i.e., out-of-network). This may happen during a medical emergency, but it can also happen when patients go to in-network hospitals thinking that all the medical providers there are also in-network or covered under their health plan. However, many practitioners who provide services to patients at in-network hospitals—such as anesthesiologists, pathologists or emergency room physicians—may not be part of the health plan’s network, even though the hospital is in-network.

What does Florida’s new law do?

Florida’s bipartisan legislation protects consumers from unexpected medical bills (HB 221). The legislation only happened because stakeholders and regulators agreed to work together and compromise. In October 2015, the Florida Office of the Insurance Consumer Advocate held a public forum to receive public and stakeholder input about how best to address the issue of unexpected medical bills. Georgetown’s own Jack Hoadley presented the findings of our report. With this recent legislation, Florida joins New York and Texas as states that use a combination of policy approaches – such as advance notice, greater transparency, and an independent process to resolve disputes between payers and providers.

Florida’s new law prohibits surprise billing in emergency situations for all types of products, including preferred provider organizations (PPOs) and exclusive provider organization (EPOs). In addition, the new law protects consumers when they are at in-network hospitals for non-emergency services, but are unknowingly treated by out-of-network physicians for covered services. The law requires that insurers “are solely liable for the payment of fees” minus any applicable cost-sharing amounts and prohibits out-of-network practitioners from balance billing. It also requires increased transparency and notice to consumers about the possibility of being treated by an out-of-network practitioner. Hospitals must post on their websites the health plans with whom they are in-network, and put consumers on notice that patients may be seen by out-of-network practitioners.

Florida’s new law further strengthens the dispute resolution process for health plans and medical providers to resolve payment issues. It encourages non-participating providers to charge, and health plans to offer, reasonable amounts prior to invoking the dispute resolution process. If the dispute resolution process is initiated, the law requires the dispute resolution organization to be transparent and publish the evidence or data the organization used to make its findings.

Publicity over unexpected medical bills and consumer complaints can land the issue of surprise bills squarely on the political agenda, as it recently did in Florida. While it is often very challenging for policymakers to balance the competing interests of payers, providers, and consumers, in this case, key stakeholders came together with a legislative solution. Time will tell whether the new requirements will meaningfully protect consumers from surprise balance bills.