States Lead on Surprise Medical Billing Protections, Congress Poised to Follow

States are at the forefront of protecting consumers from surprise medical balance billing, which occurs when consumers are billed for the balance of services they unexpectedly receive from an out-of-network provider or facility. Half of all states have enacted some level of protections and seven states have enacted comprehensive legislation to protect consumers. Congress is now considering a federal approach to address surprise balance bills.

Three bills have been introduced in the Senate, each differs in which insurer and provider markets are targeted, how reimbursements are handled, and the exact circumstances in which consumers are protected. All three bills include potentially significant roles for states by:

  • Defaulting to state laws, if they exist, in lieu of federal laws;
  • Proposing that states establish and/or calculate reimbursement rates; and/or
  • Requiring states to designate appropriate data sources to resolve balance billing disputes.

These proposals also have important implications for state insurance markets. For example, establishing limits on how much a provider can “balance bill” a consumer or insurer may trigger cost shifting to other payers. These changes may also alter negotiating dynamics between insurers and providers, leading to changes in network composition for some insurance plans.

State and federal officials may also wish to consider how best to coordinate implementation of these new policies, including what infrastructure is needed to perform and share required cost calculations. In addition, state and federal officials may also wish to consider how to coordinate the notice and disclosure requirements they impose on providers and insurers to reduce administrative burden and potential consumer confusion in the event of redundant policies.

A detailed summary of current Senate proposals is featured below. As federal proposals evolve, the National Academy for State Health Policy (NASHP) will continue to evaluate and share implications for states.