What Is Surprise Billing?

Unfortunately, it’s a story we’ve all heard. A patient has double-checked their plan to ensure the doctor they’re seeing is an in-network provider and the associated bill will be paid by their health plan. Then, a few weeks later, they receive an unexpected charge on their bill because they unknowingly received services from an out-of-network provider at an in-network facility. Another situation may be when a patient receives non-preventative care when they were seeking preventative care.

In either case, the patient’s insurance company pays for a portion of the charge, but often less than the provider’s list price for the charge. The patient is then forced to foot the outstanding amount – what’s known as “balance billing” or surprise billing.

These surprise medical billings often amount to thousands, sometimes even hundreds of thousands of dollars.

Why Does Surprise Billing Happen?

Simply enough, the patient may not completely understand what’s considered as “preventative health” by their plan. This could happen when a patient goes in for a routine check-up, which is considered preventative, but inadvertently receives care their health plan considers as pre-existing treatment. For example, the physician finds an unusual lump on a patient during a routine exam, which is 100% covered, but orders further tests on the lump – which is classified as pre-existing treatment and isn’t covered.

In other instances, a patient may seek care from an in-network facility, but the provider happens to be out-of-network. Patients may choose their hospital, doctor, or even surgeon, for planned care, but the hospital may deem it necessary to coordinate with out-of-network ancillary providers – like anesthesiologists or radiologists – in order to properly care for the patient. This could leave the patient with a large surprise bill.

So What Can Employers Do?

Employers can avoid surprise billing altogether by ensuring they have a broad network of providers available to their employees. This ensures that employees have easy access to in-network providers and drastically reduces the need for out-of-network care. (The Alliance network includes more than 135 hospitals, 6,000 medical clinics, 13,000 medical doctors and 28,000 professional providers.)

Next, employers should invest the time to properly educate their employees about their benefits plan. If an employee doesn’t know the difference between an in-network provider and an out-of-network one, they are less likely to make a wise decision, especially in an emergency situation. The Alliance provides a plethora of provider navigation and educational resources that employers can use to help guide their employees to making cost-effective choices.

Lastly, employers can guide employees to use providers that offer bundled pricing for services. These pricing arrangements prohibit surprise billing from those services.

Your Employee Received a Surprise Bill – Now What?

If a patient receives a surprise bill, they should contact their TPA (Third-Party Administrator) to understand why a charge on their bill was not covered, and what their options are.

If they want to see a particular provider and are questioning whether that provider is in-network or out-of-network, they can contact The Alliance’s Customer Service by calling 800.223.4139.

Additionally, as an atypical effort to reduce the bill, patients can actually negotiate some charges, and a medical provider may reduce the cost of a bill if they agree to pay it in full.

If all else fails, they can file a formal appeal with the health plan. Instructions on how to dispute charges are usually located on the explanation of benefits from the TPA, but most require written notice and any documents you received from the provider.

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Kathryn Otto-McLeod

Kathryn Otto-McLeod

Kathryn was Director of Member Services & Innovation at The Alliance and led the team who’s responsible for working directly with The Alliance members. She ensured The Alliance’s responsiveness and adaptability to the changing needs of its employers. She joined The Alliance in 2014 to develop new and better value for members through products and vendor partnerships. 
Before joining The Alliance, Kathryn held leadership positions in sales, account management, and product development at a variety of regional health plans, including WEA Trust, Dean Health Insurance, and Physicians Plus Insurance Corp. She also applied her skills to economic development as the Director of Health Care Initiatives at THRIVE, a regional economic development organization. 
Kathryn has an executive Master of Business Administration degree from University of Wisconsin-Madison and a bachelor’s degree in business administration from Cardinal Stritch University. She holds licenses in health and life insurance. 

Read more blog posts by Kathryn