By Kevin Lucia, Jack Hoadley and Ashley Williams

When consumers with private health insurance pay their premiums and use a provider in the plan’s network, they expect that the insurer will cover the full cost of the health care service beyond their cost sharing. However, this scenario does not always work, especially in emergency situations or when the consumer is treated by a provider who is out-of-network in a network facility. In these situations, the consumer may be faced with an unexpected balance bill for an amount beyond what the insurer paid.

Balance billing occurs when a consumer who is treated by an out-of-network provider is subsequently billed by that provider for the difference between what their health plan paid and what the provider charges. In their latest issue brief published by the Commonwealth Fund, Kevin Lucia, Jack Hoadley, and Ashley Williams analyzed laws in all fifty states and the District of Columbia to understand the current scope of state laws that protect consumers from balance billing.

Although this continues to be a relevant issue for consumers across the states, there is no explicit federal protection against the practice beyond a requirement in emergency care situations that the insurer must pay the non-network provider the normal amount it would pay in network. That requirement, however, does not restrict balance billing by the non-network provider. In the new study, we found that a majority of states do not have laws that directly protect consumers from balance billing by an out-of-network provider for care delivered in an emergency room department or in-network hospital. Only six states (California, Connecticut, Florida, Illinois, Maryland, and New York) offer a comprehensive approach to protect consumers in these situations, and even those laws have some loopholes. Another 15 states provide protection for consumers in some situations. But these state laws have gaps in the settings covered, the types of managed-care plans included, whether there is a direct ban on balance billing, and whether the laws include a means of ensuring that payment disputes between providers and insurers are resolved.

As balance billing continues to be an issue across the country and the use of narrow networks creates the potential for more use of non-network providers, the authors provide information on the different approaches used in the states that have taken action and offer insights to what federal and state policymakers can do to solve this problem.

You can read the full brief here.