What Is Surprise Medical Billing?
Surprise billing (also called "balance billing") occurs when you receive care from an out-of-network provider without knowing it - and then receive a bill for the difference between what the provider charges and what your insurance pays. This commonly happens in emergency situations where you cannot choose your providers.
For example: You go to an in-network hospital's ER. You receive care from the ER physician, anesthesiologist, radiologist, and lab. You later discover the ER doctor was out-of-network, even though the hospital was in-network. The doctor's bill? $5,000 beyond what your insurance covered.
Common Surprise Billing Scenarios
- Emergency room visits - You cannot choose providers in an emergency
- Anesthesiologists - Often out-of-network even at in-network hospitals
- Radiologists and pathologists - You never meet them, but they bill separately
- Air ambulance services - Often staffed by out-of-network providers
- Surgical assistants - You may not know who assists your surgeon
- Lab work - Samples sent to out-of-network labs without your knowledge
Since January 1, 2022, federal law (the No Surprises Act) protects most patients from surprise billing in emergency situations and certain other circumstances. You are now entitled to pay only your in-network cost-sharing amount, even when you receive care from out-of-network providers.
The No Surprises Act: Your Protections
The No Surprises Act is federal law that took effect January 1, 2022. It provides strong protections against surprise billing in specific situations.
Protection 1: Emergency Services
For emergency services at any facility (in-network or out-of-network), you can only be charged your in-network cost-sharing amount. The provider cannot bill you for the balance, regardless of whether they are in your network.
Protection 2: Post-Stabilization Care
After you are stabilized in the ER, you are protected from surprise bills for post-stabilization services at the same facility until you can be safely transferred to an in-network facility.
Protection 3: In-Network Facilities
When you receive care at an in-network facility but are treated by an out-of-network provider (like an anesthesiologist), you can only be charged your in-network cost-sharing amount. This includes scheduled surgeries, not just emergencies.
Protection 4: Air Ambulance Services
If you need air ambulance transport and the provider is out-of-network, you can only be charged the in-network cost-sharing amount. Ground ambulances are NOT covered by this protection (yet).
What "In-Network Cost-Sharing" Means
Under the No Surprises Act, you pay only what you would have paid if the provider were in-network:
- Your regular in-network copay or coinsurance
- The amount counts toward your in-network deductible
- The amount counts toward your in-network out-of-pocket maximum
The No Surprises Act does NOT apply to: ground ambulance services, short-term health plans, health sharing ministries, workers' compensation plans, or situations where you voluntarily sign a written consent to waive protections (see below).
California's Additional Protections
California had surprise billing protections (AB 72) before the federal law. California law continues to apply and in some cases provides broader protections than the federal No Surprises Act.
Under California Health & Safety Code Section 1371.9, if you receive emergency care or non-emergency care at an in-network facility from an out-of-network provider, you can only be billed the in-network cost-sharing amount. The provider must seek additional payment from your health plan, not from you.
California also has an Independent Dispute Resolution Process (IDRP) for billing disputes between providers and insurers. This process does not involve you as the patient - your cost-sharing amount is protected regardless of the outcome.
Your Right to a Good Faith Estimate
The No Surprises Act also gives you the right to receive a "Good Faith Estimate" of expected charges before you receive scheduled (non-emergency) care. This applies whether you have insurance or are uninsured/self-pay.
How Good Faith Estimates Work
- Request an estimate when scheduling any service
- The provider must give you the estimate at least 1 business day before your service (3 days for services scheduled at least 10 days ahead)
- The estimate must include all expected charges from all providers involved
- If your actual bill exceeds the estimate by $400 or more, you can dispute it
Even if you have insurance, request a Good Faith Estimate before any scheduled procedure. It helps you understand what you will owe and provides leverage if you are billed more than expected.
Beware: The Waiver Trap
In non-emergency situations, providers can ask you to sign a written consent waiving your surprise billing protections. This is legal, but you have the right to refuse.
If a provider asks you to sign a form agreeing to receive out-of-network care and waive your balance billing protections, you can refuse. They cannot deny you care for refusing to sign (in emergency situations, they cannot even ask). Read any paperwork carefully before signing.
When Waivers Are NOT Allowed
- Emergency services (you cannot be asked to waive protections)
- When you did not have a choice of provider
- Certain provider types: anesthesiology, pathology, radiology, neonatology, assistant surgeons, hospitalists, intensivists, diagnostic services
- When you were not given proper notice (at least 72 hours before service)
What to Do If You Receive a Surprise Bill
If you receive a bill that appears to violate the No Surprises Act or state law, take these steps:
Review the Bill Carefully
Check whether the services were emergency care or at an in-network facility. Compare the bill to your Explanation of Benefits (EOB) from your insurer. Look for charges beyond your in-network cost-sharing amount.
Contact the Provider's Billing Department
Call the billing department and explain that you believe the bill violates the No Surprises Act. Request that they adjust the bill to reflect only your in-network cost-sharing amount. Many issues are resolved at this stage.
Contact Your Insurance Company
Ask your insurer to confirm what your in-network cost-sharing amount should be for the services. Request that they intervene with the provider. Your insurer may be able to resolve the dispute directly.
File a Complaint
If the provider or insurer will not resolve the issue, file a complaint with the federal No Surprises Help Desk (1-800-985-3059) or your state insurance department. The federal complaint form is available at CMS.gov.
Initiate the Dispute Resolution Process
If your actual charges exceed your Good Faith Estimate by $400 or more, you can initiate the Patient-Provider Dispute Resolution process. This is a federal process for resolving billing disputes.
In California, you can file complaints about surprise billing with the Department of Managed Health Care (DMHC) if you have an HMO or regulated PPO, or with the California Department of Insurance (CDI) for other health insurance. Both agencies take surprise billing complaints seriously and can take action against violators.
The Independent Dispute Resolution Process
When providers and insurers cannot agree on payment for out-of-network emergency services, they go through the Independent Dispute Resolution (IDR) process. The good news: this dispute is between the provider and insurer, not you. Your cost-sharing amount is already fixed at the in-network rate.
How IDR Works
The provider and insurer each submit their proposed payment amount to an independent arbitrator. The arbitrator picks one of the two amounts (no splitting the difference). Factors considered include the median in-network rate, provider qualifications, patient complexity, and market rates.
Important: The IDR outcome does not affect your bill. You pay only your in-network cost-sharing amount regardless of what the arbitrator decides the insurer owes the provider.
Ground Ambulance: The Gap in Protection
Unlike air ambulances, ground ambulance services are NOT covered by the No Surprises Act. This means you can still receive surprise bills from ground ambulance providers.
Some states have their own laws protecting against ground ambulance surprise billing. If you receive an unexpected ground ambulance bill:
- Check whether your state has ground ambulance protections
- Review whether the service was truly necessary
- Ask your insurer if they will cover the charges
- Negotiate directly with the ambulance company
- Ask about financial assistance or payment plans
California's surprise billing law (AB 72) does not cover ground ambulance services. However, many California counties operate public ambulance services with set fee schedules. If you received ambulance service from a private company, you may be able to negotiate the bill or request financial assistance.
Key Takeaways
- Emergency care is protected: You cannot be balance billed for emergency services at any facility
- In-network facilities too: Out-of-network providers at in-network facilities cannot balance bill you
- Pay only in-network rates: Your cost-sharing is capped at what you would pay for in-network care
- Get estimates: Request Good Faith Estimates before scheduled care
- Do not sign waivers: Be cautious about signing consent forms that waive your protections
- Dispute improper bills: Use the complaint and dispute resolution processes if you receive surprise bills
Related Guides
Received a Surprise Medical Bill?
If you have received a surprise bill that you believe violates the No Surprises Act or state law, I can help you understand your rights and options. From reviewing your bills to helping you navigate the dispute process, I am here to assist.