What is the Surprise Insurance Gap?

After receiving emergency care at an in-network hospital, many patients are surprised to learn they received care from an out-of- network physician like a radiologist or emergency doctor, and now owe big money – hence, the surprise insurance coverage gap.

How does it affect patients?

Patients rely on insurance companies to cover them when they need it most, but insurance companies aren’t honoring their side of the deal. Patients pay their premiums month after month but, long after receiving emergency care, patients receive unexpected “balance bills” that insurance companies refuse to cover. These bills occur because insurance companies are forcing physicians out of network, leaving patients with a surprise bill they thought be covered by their insurance.



Why is this happening?


Patients can’t choose where and when they will need emergency care and they shouldn’t be punished financially for having emergencies. Health plans are purposefully creating even narrower networks for emergency care, knowing that hospital emergency departments are required by federal law to care for all patients, regardless of their ability to pay. This means insurers can easily shift more medical costs to patients and make record profits. No insurance plan is affordable if it abandons you in an emergency – and that’s exactly what the insurance companies are doing.



How Can We Fix the Gap?


Health insurance companies need to stop playing games with patient coverage and concealing their narrowing coverage networks. To solve the surprise insurance coverage gap, we advocate for state legislation that ensures every state’s “Patient Bill of Rights,” including:

  • Patients should be held financially harmless for unexpected out-of-network (OON) care.
  • In-network rates should be applied to any patient deductibles and cost-sharing.
  • An appropriate and fair standard should be created for out-of-network services using a reimbursement schedule connected to an independently recognized and verified charge-based database.
  • Physicians should no longer submit balance bills to patients for unexpected out-of-network services.
  • Insurers should be prevented from providing false, misleading and/or confusing information in regards to coverage.
  • Strong penalties for insurance companies and physicians that violate this law should be established so patients are always protected.
  • Greater transparency should be required of insurers. Specifically, network provider directories should be easily accessible for both patients and physicians, updated immediately and completely accurate.


We support use of the FAIR Health database, a national data repository that’s bringing clarity to health care costs and health insurance information. As an independent, conflict-free research platform, we believe that the FAIR Health database should be used as the gold standard to determine reimbursement rates, and is vital to closing the coverage gap.


FAIR Health provides a wealth of valuable resources for consumers in their fight against the surprise insurance gap, and patients everywhere can use the FAIR Health Medical Cost Lookup to estimate state-by-state health care costs for specific medical procedures.


Recently, Physicians for Fair Coverage commissioned a study from NORC at the University of Chicago. According to its report, NORC found that FAIR Health is “the only vendor whose data are being used for the specific purpose of establishing reimbursement standards for out-of-network services in more than one state and who currently make their data available for this purpose broadly across the United States.” Read the full research report here (PDF).

What Can I Do?

There are several ways you can help close the surprise insurance gap. If your state is currently debating this issue, you can write to your state legislators, demanding a change. If this issue isn’t currently on the table in your state, you can still sign up so you’ll know exactly when to take action. What’s more, if you’ve ever received a surprise bill for emergency care, you can share your story with us. Sharing your story helps us show legislators that this is a serious issue affecting real people.

What Should State Legislators Do?

All state legislators seeking to solve the surprise insurance gap should pass a bill that meets the standards we laid out above. To accomplish that, we recommend legislators replace surprise balance billing with laws that:

  • Establish a rate that defines the amount physicians should be fairly paid for out-of-network care. This rate, known as the minimum benefit standard (MBS), will be obtained through a non-profit database, which is not affiliated nor financially supported by an insurance carrier.
  • Ensures the MBS will be equal to the 80th percentile of a geographically comparable database. This means that if you ranked from 1-10 all the physician charges in one specific geographic region for a procedure, the usual and customary charge would be the 8th ranked charge.
  • Usual and Customary Charges are charges physicians routinely bill for their professional services.
  • Offers a mediation process that can be initiated by the patient or physician, but forbids the physician from filing for mediation if the physician regularly sends out-of- network balanced bills to patients.
  • Authorizes the appropriate insurance regulator to take correct action and impose penalties and sanctions on insurance companies.


Are you a state legislator or member of an organization who wants to end the surprise insurance gap? Contact us and we can help get you started with a model legislation.

Are you a state legislator or member of an organization who wants to end the surprise insurance gap?

About the Campaign

End the Surprise Insurance Gap is led by Physicians for Fair Coverage (PFC).PFC is a multi-specialty alliance of doctors nationwide, who are advocating to improve patient protections, promote transparency in the health system and increase access to care. Learn more at thePFC.org.