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Surprise Billing

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Items to Watch in 2020  
  • How standard rates are determined
  • Whether a process for disputes exists for providers and hospitals
  • How out-of-network (OON) reimbursement disputes will be resolved: benchmarked to median or through dispute resolution
  • Who settles disputes (e.g., independent third-party)

The American Medical Association (AMA) and 100+ organizations are asking rate-setting/benchmarking not be the solution given:[1]

  • Rate setting/benchmarking would “shift marketplace leverage to health insurers at the expense of providers”
  • Rate setting/benchmarking would result in declining in-network reimbursements to the median. Or put another way, the savings and costs would be paid for by in-network hospitals and providers per the Congressional Budget Office study (“80%+ of the budgetary impact of the rate-setting mechanism would come from changes to in-network payment rates”)
  • The success of NY’s independent OON dispute resolution process, which has saved patients’ $400+ million on emergency care and reduced OON billing by 34% since 2015[2]

The Federation of American Hospitals has stated benchmarking would be devastating to health care providers, especially rural physicians and hospitals.[3]


What’s Next – More States and Federal Surprise/Balanced Billing Regulation to Come?

With 78% of Americans supporting legislation to protect patients from surprise medical billing (KFF Sept 2019 poll) and the Congressional Budget Office estimating ~$25B+ in savings in ten years from surprise medical billing legislation, surprise billing legislation looks likely to continue.[4][5]

26 states have enacted comprehensive or limited surprise billing legislation according to the Commonwealth Fund and Peterson-KFF Health System Tracker. Two states, MI & PA, had active surprise billing legislation in 2019 and 20+ states had considered surprise billing according to the National Academy for State Health Policy and American College of Surgeons.

Nationally, Congress introduced 11 surprise billing proposals/acts in 2019 per the National Academy for State Health Policy. Federal passage would apply to self-insured employer plans or 61% of insured workers (or 81% of insured workers at large firms) according to the Kaiser Family Foundation.[6][7]

As of last month, the House Committee on Energy and Commerce is investigating surprise billing, requesting data from top insurers and physician staffing companies on 12/19/19 and private equity firms in September 2019.[8]


Federal versus State Legislation?

Federal legislation would apply to self-insured employer plans or 61% of insured workers (or 81% of insured workers at large firms) according to the Kaiser Family Foundation. State legislation applies to state regulated insurance plans.[7] For example, in Texas, state regulated health plans cover ~16% of Texans.


Latest State Surprise Billing Changes – Are You Prepared?

Surprise billing legislation can impact a healthcare organization’s ability to perform OON services and negotiate rates with health plans. New Mexico, Texas, and Washington’s comprehensive surprise billing (or balancing billing) laws went into effect January 1, 2020 with Colorado’s expected sometime this year. Comprehensive surprise billing legislation applies to state regulated insurance plans and

  • Prohibits balance billing for out-of-network (OON) emergency services and non-emergency care at in-network facilities delivered by OON providers
  • Sets the payment rate (i.e. government rate-setting) or resolution process for surprise medical bills
To help you with recent state surprise/balanced billing changes, we’ve included the most up-to-date resources:

 CO  American College of Surgeons Quick Overview for Colorado
Surprise Billing Legislation, Updates, & OON Reimbursement Dataset
Out-of-network Arbitration Program, Process, & Request Form
 NM  Surprise Billing Protection Act Summary
 TX  What Physicians Should Know about Surprise Billing/Balance Billing (SB1264)
American College of Surgeons Quick Overview for Texas
Provider Webinars for Mediation/Arbitration Portals and Benchmarking Database
TMA’s Surprise Billing Summary 7-Pgs (SB1264)
 WA  Medical Providers & Balance Billing Act
American College of Surgeons Quick Overview for Washington
Webinar for WA State Medical Assn & WA State Hospital Assn
Balance Billing Data Set (Anesthesiology, Emergency Dept, Hospitalists, Lab, Radiology) & Arbitration Process


  1. O’Reilly, K. B. (2019, October 10). Surprise medical bills: Physicians want market-based fixes. Retrieved from American Medical Association:
  2. NYDFS Press Office. (2019, September 17). Governor Cuomo Announces Success of New York’s Landmark Out-of-network Law Protecting Consumers From Surprise Medical Bills [Press Release]. Retrieved from
  3. Paavola, A. (2019, November 14). Experts talk surprise billing: 4 key takeaways. Retrieved from Becker’s Hospital Review:
  4. Kirzinger, A., Kearney, A., & Brodie, M. (2019, September 12). KFF Health Tracking Poll – September 2019: Health Care Policy In Congress And On The Campaign Trail. Retrieved from Kaiser Family Foundation (KFF):
  5. King, R. (2019, July 16). CBO: Senate surprise billing legislation would save feds $7B over next decade. Retrieved from FierceHealthcare:
  6. Cousart, C. (2019, December 17). States Lead on Surprise Medical Billing Protections, Congress Poised to Follow. Retrieved from The National Academy for State Health Policy (NASHP):
  7. Kaiser Family Foundation (KFF). (2018, October 3). 2018 Employer Health Benefits Survey [Press Release]. Retrieved from Kaiser Family Foundation (KFF):
  8. The Energy and Commerce House Republicans. (2019, December 19). Letter to insurers and physician staffing companies on surprise billing [Press Release]. Retrieved from The Energy and Commerce House Republicans:

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