Surprise billing continues to garner significant media scrutiny. Stories of unexpected medical bills in the thousands of dollars exacerbate patient fear and frustration around health care affordability. Along with drug pricing, surprise billing has become a focal point for federal legislators and consumers alike. Federal efforts have focused on affordability and examining private equity’s investment in stalling surprise billing initiatives. This attention has spurred debate around potential government fixes at the federal level. At the same time, states continue to enact legislation while providers and insurers (and their respective lobbyists) square off and patients are stuck in the middle. 

Advisory Board examined the three major factors driving surprise billing and five key components of state surprise billing legislation. States’ experiences can prepare stakeholders for the expected effects of similar proposals at the federal level and inform lobbying efforts that align with organizational goals. 

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Insight #1

The three factors driving surprise billing are: rising penalties and costs for out-of-network care, increasing interest in provider outsourcing, and declining network adequacy of health plan products.

Insight #2

Some states require providers or payers to notify patients of their rights and obligations for out-of-network care. Most states follow basic notification types, but some states go further to protect patients by placing a greater burden on payers or providers.

Insight #3

To maximize patient understanding of benefits, notification requirements must include both payer and provider communication at multiple patient touchpoints. Advisory Board research shows that patients typically rely on multiple resources for health care cost information.

Insight #4

As of December 2019, the focus of surprise billing legislation has been almost entirely on mitigation: patient notification of out-of-network costs, payment shields, and payment resolution. Alterations to provider network composition have been secondary considerations.