First, let's try to step into the shoes of the people to whom this happens. Let's say you hear the dreadful words, “You have cancer.”  But then hope is interjected with the words, “It is treatable, and a certain treatment has a very high survival rate.”   No question, this treatment is what you want no matter what.

You learn, however, that no in-network provider under your health plan can offer this treatment. But there are out-of-network providers that offer this treatment, and under your health plan, they are to be paid in-network since the treatment cannot be furnished in-network. You feel assured that everything is going to work out.

You undergo the treatment, and it saves your life. You are so grateful and relieved, but then a dark cloud appears on the horizon. You start receiving bills for the care. Big bills. And they total over $250,000. How can this be? You thought the plan was to pay in-network. What happened? You are being balanced. So, can they do that?

To start, you look to the No Surprises Act (NSA) 42 USC § 300gg-132, 42 USC § 300gg-131.  Under the NSA, an out-of-network provider cannot balance bill claims, if the provider is paid at in-network rates for services under the NSA. The NSA disallows balance billing but only for certain services. These are:

1. emergency services;
2. non-emergency services provided by out-of-network providers at in-network facilities; and
3. air ambulance services, unless the patient has been properly informed and has consented to out-of-network care.

Despite cancer treatment being critical, it does not fall under the first or third area of coverage under the NSA.  Your treatment also did not occur at an in-network facility, so the second area also does not apply. So that law is no help.

Next, you look at how this occurred under the plan documents. To start, you look to see if the payments were properly made under the plan. If not, you follow the claim procedure to challenge that. If they were, then you look to the provider agreement which is likely mentioned in the document but not set out. That may be where the answer lies. You likely do not have that. You need the guidelines mentioned in the plan, and perhaps a standard agreement if it is part of the plan.

Health plans enter into provider agreements with various providers who contractually agree to pay a certain amount for their services.  That may be a very reduced rate. Such plans specifically state that in-network payments are paid pursuant to this agreement.  That does not answer the question, however, whether the payments made are reasonable as to the value of the services provided nor whether the charges were usual and customary, when a provider did not agree to that payment.

Now you turn to the law in the state where treatment was rendered. The case Vanguard Plastic Surgery, PLLC v. Unitedhealthcare Ins. Co., 658 F. Supp. 3d 1250, 1263-64 (S.D. Fla. 2023), which has recently been cited this year as instructive, has an informative analysis.  It reviewed whether a provider could sue a health insurer under state law, not ERISA, and challenge the payments made.  The matter involved treatment for lobular carcinoma which had an increased risk of breast cancer. United only paid approximately $3,100 and Vanguard had billed over $158,000 for treatment. Under Florida law, United was required to reimburse pursuant to an agreement, or under the fair market or reasonable value of the services rendered.

Vanguard sued United only under Florida law. Of course, United contended that ERISA preempted the matter and filed a motion to dismiss.  This was rejected, as Vanguard was not suing under the plan but was seeking payment under Florida law requiring the fair market or reasonable value of the services rendered.  The magistrate judge, with a well-articulated opinion, denied, for the most part, the motion to dismiss.  He held, Vanguard "allege[d] it performed [several] surgeries with the understanding and expectation that Defendants would reimburse Plaintiff for its services at rates equal to either the shared savings network rates required by applicable agreements, or the fair market, or the reasonable value of Plaintiff's services", Id. at 1265. The district court judge agreed, entering an order.

Most, if not all states have laws on what is reasonable as to medical charges. In Alabama, there is case law prohibiting charges that are not fair and reasonable, or which exceed the usual and customary rates. See, Eufaula Hosp. Corp. v. Lawrence, 32 So. 3d 30, 36 (Ala. 2009). There is also the hospital lien statute. Alabama Code § 35-11-370.  So you can be balance billed, but the charges generally must be fair and reasonable or usual and customary and arguably so must the payments made.