In 2024, balance billing laws are a combination of the federal No Surprises Act and individual state protections. While federal law covers out-of-network providers at emergency services and in-network facilities in all states, states like California and New York have additional stronger protections and specific arbitration systems in place that apply to state-regulated plans.
Balance Billing Laws by State 2024
Taking healthcare in the U.S. is already expensive, but when a patient thinks they have made the correct payment according to their insurance and even then a new bill arrives, it is called "surprise billing" or "balance billing." In 2024, this landscape has changed significantly because now federal law and state laws are working together.
What is Balance Billing (simple explanation)
Balance billing occurs when you take treatment from a doctor or hospital that is not part of your insurance network (out-of-network).
Suppose the total cost of a medical procedure is $1,000. Your insurance company says the "allowed amount" for this procedure is only $700. If the doctor is in-network, they waive the remaining $300. But if the doctor is out-of-network, they can ask for the remaining $300 directly from the patient. This billing of the "balance" amount is called balance billing.
In 2024, the goal of laws is to end this unexpected financial burden, especially when the patient does not have the option to choose a provider (like in emergency situations).
Federal Law: What the No Surprises Act covers
From January 1, 2022, the federal No Surprises Act (NSA) was implemented across the U.S. Its primary goal is to target those situations where patients used to receive the most surprise bills.
Under federal law, these protections are available:
- Emergency Services: If you have an emergency, you can go to any hospital (even if it is out-of-network), you will only have to pay at in-network rates.
- Out-of-network providers in in-network facility: Many times a hospital is in-network, but the anesthesiologist or radiologist working there is out-of-network. The NSA bans balance billing in such cases.
- Patient Cost-Sharing: The patient's responsibility will only be as much as the in-network cost would be according to their insurance plan (co-pays, deductibles).
Federal law has applied since 2022 and bans balance billing in emergency and certain non-emergency cases. For more information, you can see details on CMS.gov.
The maximum out-of-pocket limit in health insurance is the highest amount you have to pay out-of-pocket in a year (including deductible, copay, and coinsurance). After this limit, the insurance company pays 100% of the covered expenses.
State Laws vs Federal Law – Which applies?
Here the confusion begins. In the U.S., there are two types of insurance plans: State-regulated plans (which individuals or small businesses often buy) and Self-funded employer plans (which large corporations give to their employees).
- Self-funded plans: Federal Law (No Surprises Act) always applies to these. States cannot impose their own rules on them.
- State-regulated plans: If there is any "strong" law of its own on balance billing in your state, then that state law will apply. If the state law is not there or is weak, then protection of federal law will be obtained.
The insight is that if there is a strong law in the state, it can apply; otherwise, the federal system is followed. This means that both your state's location and your insurance type determine how a dispute will be resolved.
States with Strong Balance Billing Protections (Examples)
Some states made their strict laws even before the federal law. These states often run their own "Independent Dispute Resolution" (IDR) or arbitration system.
- California: The law here is quite comprehensive. If you are in an in-network facility, no non-contracting provider can charge you extra. Their payment dispute system is quite robust.
- New York: The "Surprise Bill Law" in NY is quite old. It uses a "baseball-style" arbitration for disputes between doctors and insurers, where the patient is not brought in the middle.
- Texas: Texas passed Senate Bill 1264 in 2019 which protects patients from balance billing. The Texas system focuses on mediation and arbitration.
- Florida: There are strong protections for emergency and certain non-emergency services in Florida, which apply to both PPO and HMO plans.
- Illinois: Here too, state law sets payment rules between insurance companies and providers so that the burden does not fall on the patient.
In these states, the level of consumer protection is high because they have their own infrastructure to handle these disputes.
Every health insurance plan has coverage limits, which means the insurance company will only cover your medical expenses up to a maximum amount—after that, you have to cover the expenses yourself.
States with Partial or Limited Protections
There are many states that have provided protections, but they do not cover everything.
- Emergency Only: Some states only protect emergency room bills, but if you are admitted to the hospital and an out-of-network specialist comes there, then perhaps the protection may decrease.
- Ambulance Gaps: The biggest gap is of "ground ambulance." Most states (and federal law too) are not able to fully control the billing of ground ambulance. Ambulance billing protections are limited in some states and the same rule does not apply everywhere.
States with Minimal or No Additional Protections
Some states have not passed any separate laws of their own. They depend entirely on the Federal No Surprises Act.
- Example - Wisconsin: Historically, there were quite limited protections on balance billing in Wisconsin. In such states, federal law is now the primary safety net. If your plan is in these states, then you have to file a dispute according to the rules of CMS (federal agency).
REAL U.S. SCENARIO (Example)
To understand this thing better, let's look at a realistic example:
- Name: Sarah Johnson
- City: Dallas, Texas
- Situation: Sarah has severe stomach pain at night and she goes to the ER of an in-network hospital in Dallas.
The hospital was in-network, so Sarah thought everything was fine. However, the doctor who checked her in the ER was not a hospital employee but was part of an out-of-network contracting group. A few weeks later, Sarah receives a bill for $2,500 (balance billing).
Resolution:
Both Texas law and Federal law help Sarah here. Because this was an emergency visit, under Texas law the provider cannot ask for more money from Sarah than the in-network cost-sharing. The insurance company and the doctor have to settle among themselves through "Independent Dispute Resolution." Sarah only had to pay her in-network deductible, and the $2,500 bill was cancelled.
If Sarah were in a state where there is no state law, the Federal No Surprises Act would provide exactly the same protection, just the process of dispute resolution would be through the federal portal.
Now let's understand further which situations these laws are most useful in and what those loopholes are that you should be careful of in 2024.
If your emergency room bill is unexpectedly high, don't pay it without thinking—because you can significantly reduce it by legally negotiating. Smart patients always check for billing errors and demand a discount.
Common Situations Where Balance Billing Issues Occur
Even though laws have become quite strong, there are still some situations where patients can get a "surprise."
Emergency care
This is the most common scenario. When you go to the emergency room (ER) because of an accident or sudden illness, then you do not have time to check whether the doctors there are in your insurance network or not. According to the No Surprises Act, for emergency care you should always get in-network rates, even if the hospital is out-of-network.
In-network hospital but out-of-network doctor
This is a very big "trap." You checked that the hospital is in-network, but the specialists who are there—like Anesthesiologists, Radiologists, or Pathologists—they are often independent contractors. They are not on the hospital's payroll and perhaps they do not have a contract with your insurance. Federal law now protects these "ancillary services," so now they cannot do balance billing to you.
Air ambulance vs ground ambulance
There is a big difference here. Air ambulances (helicopters that transport patients) are now covered under federal law, and their balance billing is banned. But, Ground ambulances (which run on the road) are still mostly outside federal law. This means that if the ambulance is out-of-network, then you can get a big bill, unless your state specifically restricts it.
Important gaps that people don't understand
Despite having laws, there are some such areas where you should remain careful:
- Ground ambulance loophole: As I told you, federal protection still does not apply to ground ambulances. Some states have tried to cover this, but this is still a major gap.
- Self-funded employer plans: If your company is large and they run their own insurance fund (self-funded), then state laws do not apply to them. Only federal law (NSA) applies to them. Therefore, you should always take confirmation from your HR.
- Consent forms: Sometimes out-of-network providers make you sign a "waiver" or "consent form." If you have knowingly signed this form that you are ready to pay extra, then you can lose your federal protections. In emergency cases this form is not valid, but in routine care this is a risk.
If your insurance claim status shows "Under Review" and you're confused about what it means, don't ignore it—this stage determines whether your claim will be approved or delayed/denied. At this stage, the insurance company verifies your documents, policy coverage, and details.
FAQs (Frequently Asked Questions)
1. What is balance billing?
Balance billing occurs when an out-of-network provider asks for the remaining "balance" amount from you after the payment of your insurance company.
Balance billing occurs when an out-of-network provider asks for the remaining "balance" amount from you after the payment of your insurance company.
2. Is balance billing illegal in every state?
No, it is not illegal in every state, but since 2022 the Federal No Surprises Act has banned it across the U.S. for emergency services and out-of-network doctors in in-network facilities.
No, it is not illegal in every state, but since 2022 the Federal No Surprises Act has banned it across the U.S. for emergency services and out-of-network doctors in in-network facilities.
3. What does the No Surprises Act cover?
It covers and limits the billing of emergency services, air ambulance transport, and out-of-network providers (like anesthesiologists) working in in-network hospitals.
It covers and limits the billing of emergency services, air ambulance transport, and out-of-network providers (like anesthesiologists) working in in-network hospitals.
4. Are ambulance bills covered?
Air ambulance bills are covered, but ground ambulance bills are mostly outside federal law. In some states, they have a separate protection.
Air ambulance bills are covered, but ground ambulance bills are mostly outside federal law. In some states, they have a separate protection.
5. What is the difference between state law and federal law?
State law only applies to those insurance plans which the state regulates (HMOs/PPOs). Federal law applies to all, especially to self-funded employer plans, and gives a baseline protection.
State law only applies to those insurance plans which the state regulates (HMOs/PPOs). Federal law applies to all, especially to self-funded employer plans, and gives a baseline protection.
6. What to do if a wrong bill comes?
First of all, check the Explanation of Benefits (EOB) of your insurance. If it feels like balance billing, then talk to the provider and file a complaint in the federal or state insurance department.
First of all, check the Explanation of Benefits (EOB) of your insurance. If it feels like balance billing, then talk to the provider and file a complaint in the federal or state insurance department.
Conclusion
The entire system of balance billing laws by state 2024 is a mix of federal rules and state-specific protections. While the No Surprises Act has created a strong safety net, states like California and New York give even more security to patients through additional arbitration processes. But, gaps like ground ambulance are still present, therefore patients should keep checking their insurance coverage and bills carefully.
Author: Date Singh – Insurance policy researcher helping people understand insurance claims and medical bills.
DISCLAIMER
This content is for educational purpose only. This is not legal or insurance advice. State laws and individual plans can be different, therefore it is important to consult with official sources or a qualified professional for your specific situation.
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Insurance-Basics
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