surprise billing

Note: This is a general primer on balance or “surprise” billing. For the latest on the law in Virginia, which went into effect on January, 1, 2021, click here.

What is surprise billing?

Imagine going to the emergency department, whether for stomach pain, a cut or broken bone, or as the result of a traumatic event. In any case, the emergency department is required by law – and moral obligation – to treat the patient. Unfortunately, some patients have insurance that considers certain emergency treatment out-of-network, and that patient will later receive a “surprise” medical bill from the provider to cover the cost of care. This is a practice known as balance billing.

• A surprise bill is a charge billed by the provider (a doctor, specialist, or technician) who the insurance company does not cover because it deems the healthcare provider out-of-network.

• A surprise bill is not a deductible, co-payment, or co-insurance or any amount deemed to be the patient’s responsibility as part of an in-network plan.

How does a surprise bill occur?

Patients are often shocked and upset (rightfully so) to find that the health insurance product they pay for is not providing the coverage it should. Knowing emergency physicians must treat all people regardless of ability to pay or insurance status, payers use the federal law – the Emergency Medical Treatment and Labor Act, or (EMTALA) – to offer physicians unfair reimbursement rates that are unsustainable for physicians and emergency departments. Some physicians instead are forced to stay out of network and bill patients for care, creating a “surprise” bill.

This phenomenon might also be referred to as the surprise insurance gap.

How does this affect the patient?

Patients are led to believe that their health insurance company will cover the cost of all – or the majority of – medical expenses. This is not the case in modern America.

Insurance companies are charging higher premiums and providing less coverage than in the past, and patients are often stuck with higher out-of-pocket costs with higher deductibles and co-insurance.

To enroll more people, insurance companies offer plans with “affordable” premiums that often leave the patient with very little coverage for emergency medical costs. This shifts cost to the patient and medical providers, and enriches the insurance companies.

• Fifty five percent of voters reported paying more for insurance coverage than they have in the past. (Morning Consult, 2016)

• Twice as many Americans said that their insurance coverage has gotten worse (30 percent) in the past year, compared to those who said that it had gotten better (15 percent). (Morning Consult, 2016)