“According to a report, 45% of insured adults received a medical bill for a service they believed was covered by their insurance, and nearly 1 in 5 received a bill they couldn’t afford.” Commonwealth Fund report
You may think you understand your health plan—but one unexpected bill from an out-of-network provider can erase that confidence and saddle you with thousands of dollars in unexpected charges. Fortunately, a major federal law, the No Surprises Act, has been effective since January 1, 2022, which has reshaped how these bills impact patients.
In this comprehensive guide, there is everything you need to know about out-of-network billing, your rights, and practical steps to protect yourself.
What Is Out of Network Medical Billing?
Out-of-network billing occurs when a healthcare provider or facility has no contractual agreement with a patient’s health insurance plan. Because no pre-negotiated rate exists, insurers pay less or sometimes nothing leaving patients responsible for a larger portion of the bill.
In-Network vs. Out-of-Network: The Core Difference
| Aspect | In-Network | Out-of-Network |
| Rates | Contracted discounts (e.g., 50-70% off UCR) | Full UCR rates |
| Patient Cost-Share | Predictable copays/deductibles | Potentially higher; capped by NSA for surprises |
| Reimbursement | Automatic per contract | Negotiated or IDR arbitration |
| Consent Required | None | Written notice/waiver for non-emergencies cms |
How the UCR Rate Works
The UCR rate is the benchmark insurers use to determine how much they’ll pay for an OON service. It’s calculated based on what providers in a geographic area typically charge for a similar service. For example, if your provider charges $400 for a service and the UCR is $250, your insurer pays a portion of $250, and the provider can bill you for the remaining $150 difference, plus any cost-sharing that applies to the $250.
What Is Balance Billing?
Balance billing is when an out-of-network provider sends a patient a bill for the difference between their total charge and what the insurer paid. It is distinct from standard cost-sharing (copays, deductibles, coinsurance) and can run into thousands of dollars, often arriving weeks after care.
Surprise Billing vs. Balance Billing
These terms are often used interchangeably, but have a technical distinction:
- Balance billing is the practice of billing a patient for the gap between a provider’s charge and what the insurer paid.
- Surprise billing refers specifically to balance bills that arise from situations patients couldn’t control, such as receiving care from an OON provider at an in-network facility, or during a medical emergency.
Surprise billing is the primary target of federal consumer protection law (see below).
The No Surprises Act: Your Federal Shield Against Unexpected Bills
Enacted as part of the Consolidated Appropriations Act of 2021 (P.L. 116-260), the No Surprises Act (NSA) took effect on January 1, 2022. It represents the first major federal legislation specifically targeting surprise medical billing.
What the No Surprises Act Covers
According to CMS, the No Surprises Act protects patients covered under group and individual health plans in the following situations:
Emergency Services
If you receive emergency care from an OON provider or facility, you can only be charged your plan’s in-network cost-sharing amount (copayment, coinsurance, or deductible). You cannot be billed for emergency services. This also covers post-stabilization services unless you provide written consent to waive this protection.
Non-Emergency Services at In-Network Facilities
When you receive care at an in-network hospital or ambulatory surgical center, certain providers who are out of network, including:
- Emergency medicine physicians
- Anesthesiologists
- Pathologists
- Radiologists
- Neonatologists
- Laboratory specialists
- Assistant surgeons
- hospitalists
- Intensivists
They cannot bill you. You pay only the in-network cost-sharing amount.
Air Ambulance Services
OON air ambulance providers from certified air carriers are covered under the NSA’s balance billing protections.
What the No Surprises Act Does NOT Cover
The NSA does not apply to:
- Medicare, Medicaid, Indian Health Services, TRICARE, or VA health plans. These programs have separate protections.
- Ground ambulance services (though CMS has initiated rulemaking to address this)
- Situations where you voluntarily consent in writing to receive OON care and waive your protections (though you can never be required to sign).
- Self-pay patients (though they receive Good Faith Estimate protections)
The Good Faith Estimate Requirement
Under the NSA, uninsured or self-pay patients have the right to receive a written Good Faith Estimate of expected costs before receiving non-emergency services. If you schedule care at least 3 business days in advance, your provider must deliver this estimate within 1 business day. If you schedule 10 or more days out, they have 3 business days.
If your final bill exceeds your Good Faith Estimate by $400 or more, you have the right to dispute it through the Patient-Provider Dispute Resolution (PPDR) process.
How Out-of-Network Billing Works — Step by Step
Understanding the billing flow helps patients spot errors and take action faster.
The OON Claims Process
Service is rendered:
You receive care from an OON provider, either knowingly or unknowingly.
Claim submission:
The provider submits a claim to your insurer (or you submit it yourself using a superbill if the provider doesn’t file on your behalf).
UCR determination:
Your insurer calculates the UCR allowed amount for the service in your area.
Explanation of Benefits (EOB):
Your insurer sends you an EOB detailing the provider’s billed amount, the insurer’s allowed amount, what the insurer will pay, and your financial responsibility.
Balance bill:
The OON provider bills you for the difference between their charge and the insurer’s payment — this is the balance bill.
Common Scenarios Where OON Billing Occurs
- Emergency room visits at an in-network hospital where OON physicians treated you.
- Surgical procedures where the operating surgeon is in-network but the anesthesiologist is not.
- Lab work sent to an OON laboratory from an in-network facility.
- Specialist referrals where the referred specialist is not in your plan’s network.
What is Independent Dispute Resolution (IDR)
When an OON provider and a health plan cannot agree on payment, the No Surprises Act established a federal Independent Dispute Resolution (IDR) process, sometimes called arbitration. A neutral third party reviews the dispute and determines a binding payment amount.
How the IDR Process Works
Either the provider or the insurer can initiate the IDR process after a 30-day open negotiation period fails. The IDR entity considers the Qualifying Payment Amount (QPA), generally the insurer’s median in-network rate for the same service, as a starting benchmark, along with other relevant factors.
Key IDR Timelines
- 30 days: Open negotiation period begins after the insurer’s initial payment
- 4 business days after failed negotiation: Either party may initiate federal IDR
- 30 business days: IDR entity must issue a final determination
State-Level Protections Beyond Federal Law
While the No Surprises Act provides a federal floor, many states have enacted their own balance billing laws. Because the NSA primarily covers fully-insured group and individual plans, self-funded employer plans (which cover the majority of employer-insured Americans) were historically outside state jurisdiction.
States with notable OON billing protections include New York, California, Texas, and Florida, each with varying rules on surprise billing, arbitration thresholds, and disclosure requirements. Always check your specific state’s Department of Insurance for the most current protections.
Conclusion
Out-of-network medical billing is one of the most complex and costly challenges in the U.S. healthcare system. The No Surprises Act has meaningfully shifted power toward patients by banning balance billing in emergencies, requiring cost transparency, and establishing a federal dispute resolution process. But significant gaps remain, particularly for self-funded employer plans, ground ambulance services, and mental health care.
The most important steps you can take are to verify network status before every procedure, request a Good Faith Estimate, and know your right to dispute unexpected bills through CMS, your insurer, or your state Department of Insurance.
Whether you owe $200 or $20,000, you have more leverage than most billing notices suggest. Get expert help with Rhode Island for out-of-network billing disputes, claim denials, and compliance requirements.
Rhode Island Medical Billing specializes in OON claim submission. Contact us today for a free consultation on optimizing your OON billing process.
Frequently Asked Questions
Does OON spending count toward my deductible?
Under the No Surprises Act, amounts you pay for NSA-protected OON services do count toward your in-network deductible and out-of-pocket maximum. However, for OON care that falls outside NSA protections, your plan’s terms govern whether those costs count — and many plans have separate, higher OON deductibles.
Can I be forced to sign away my balance billing protections?
No. According to CMS, you are never required to give up your protections from balance billing. You may voluntarily waive them in writing for certain non-emergency services, but no provider or facility can condition your care on signing such a waiver.
What if my insurer underpays an OON provider and the provider bills me the difference?
If the service is NSA-protected, this is a violation. Report it to CMS at 1-800-985-3059. If it falls outside NSA protections, you may still be able to negotiate, appeal to your insurer, or seek assistance from your state’s Department of Insurance.