This article is general information, not insurance, medical, legal or financial advice. Surprise billing protections differ greatly by country, state and plan type, and they change over time. Check the rules where you live.
A surprise bill is an unexpected charge, usually from a provider you did not choose or did not know was outside your plan’s network. It is one of the more frustrating experiences in health care because the person often did everything right: they picked an in-network hospital, showed their card, and still received a large bill later.
Why surprise bills happen
Health plans negotiate prices with providers that join their network. Providers outside that network have no such agreement, so the plan may pay less, or nothing, and the provider may bill the patient for more. The difference is explained in in-network and out-of-network care. A bill for the leftover gap is balance billing.
Most surprises fall into a few patterns.
Emergencies. In an emergency you generally go to the nearest facility, not the one in your network. The hospital or the doctors treating you may be outside the plan. Emergency care coverage is discussed under emergency room.
Out-of-network clinicians at in-network facilities. You might choose an in-network hospital, but individual clinicians there, such as an anesthesiologist, pathologist, radiologist or assistant surgeon, may belong to separate groups with their own contracts. You may not meet or choose them.
Out-of-network labs. A lab test ordered during an in-network visit might be sent to an outside lab.
Ambulance transport. Ground and air ambulances may be run by companies that do not contract with your plan.
Network changes. A provider may leave a network between your booking and your visit, or directories may be out of date.
Services not covered. A bill may be unexpected simply because the plan does not cover a service at all, which is a different problem from network status. See coverage exclusions.
How big the difference can be
Here is a hypothetical example, with invented numbers. Suppose an anesthesia group charges $2,000 and would be paid $800 if in network. Out of network, your plan might recognize an allowed amount of $700 and apply a higher coinsurance of 40 percent, so you owe $280 ($700 times 0.40). If the group is permitted to balance bill, it could also ask for the $1,300 gap ($2,000 minus $700), for a total of $1,580 ($280 plus $1,300). In an in-network case, your cost sharing might be 20 percent of $800, or $160.
Check: $700 times 0.40 equals $280; $2,000 minus $700 equals $1,300; $280 plus $1,300 equals $1,580; $800 times 0.20 equals $160. Real plans and prices differ.
Protections that may exist
Many jurisdictions have introduced rules to limit surprise bills, often in situations where the patient had little or no ability to choose. Depending on where you live and what plan you have, protections may include:
- limiting what you can be charged for emergency care from out-of-network providers
- limiting out-of-network charges for certain services at in-network facilities
- requiring that you pay only your in-network cost sharing in covered situations
- requiring providers to give notice of out-of-network status or cost estimates before non-emergency care
- allowing providers and plans to settle payment between themselves instead of billing you
Coverage of these rules is not universal. They may not apply to all plan types, to all services (ground ambulances are often treated differently), or to care in all settings. Some require you to have received a particular notice, or to have consented, to be waived. Because the rules are technical, do not assume you are protected or unprotected; check.
Ways to reduce the chance of a surprise
For planned care:
- Confirm network status for everyone involved, not just the facility. Ask whether the surgeon, anesthesia group, assistants and lab are in network.
- Ask for estimates in advance, and get them in writing when possible.
- Check your plan’s network list and call the insurer to verify, since directories are not always current.
- Ask the provider’s office about in-network alternatives for specific services.
- Read before you sign. Forms at registration may include consent to out-of-network care. Ask what you are agreeing to and whether you can decline.
- Consider prior authorization requirements, which affect whether a plan will pay. See prior authorization.
For emergencies, it is usually not practical to compare options. Get care first, then deal with the paperwork.
What to do when a surprise bill arrives
- Do not pay immediately. Take time to check it.
- Compare it with your explanation of benefits. Look at how the claim was processed and whether it was treated as in network or out of network. See explanation of benefits.
- Ask the insurer whether the claim was handled correctly, especially for emergencies or care at an in-network facility. Mistakes in how a claim is coded can change the result.
- Ask the provider whether it can accept the plan’s allowed amount or a reduced amount.
- Look into protections that may apply, using your insurer, a regulator or a consumer assistance office.
- Request an appeal if the insurer paid less than it should have. A claim appeal is possible in many cases.
- Consider a complaint to a regulator if you believe the rules were broken. The steps are covered under insurance complaint process.
- Negotiate if the balance stands. Approaches are described in bill negotiation.
- Keep records of calls, letters and dates.
If the account goes unpaid, it can lead to medical debt, so it is worth responding before the due date even if you are disputing the amount. You can ask the provider to hold the account while you resolve it.
Outcomes vary, but many unexpected charges are reduced or corrected when questioned, and knowing which questions to ask is a good start.