Getting a handle on out-of-network costs
How federal protections and strategic solutions can help employers and employees navigate out-of-network health care costs.
- Federal protections have reduced some surprise billing - The No Surprises Act, effective January 2022, prohibits balance billing for many emergency and ancillary services
- Gaps in protection remain - Ground and air ambulance services, certain referrals and other scenarios can still expose employees to unexpected out-of-network charges
- Proactive management delivers measurable results - Combining advocacy services, employee education and strategic benefit design can significantly reduce financial exposure and improve employee satisfaction
Out-of-network health care costs represent a persistent challenge for employer-sponsored health plans. In fact, approximately 1 in 5 Americans have received an unexpected out-of-network medical bill since January 2022.1
Even with recent federal protections, unexpected charges continue to arise, creating financial uncertainty for employees and cost volatility for employers. Understanding the current regulatory landscape and implementing targeted mitigation strategies may help employers better control spending while protecting workforce financial wellness.
No Surprises Act: How it changed the health care landscape
What’s a balance bill?
Difference between the provider’s charge and the amount allowed by the health plan
The No Surprises Act, which took effect Jan. 1, 2022, established federal protections against balance billing in many common scenarios.2 Under this law, employees receiving emergency care from out-of-network providers can only be charged their network cost-sharing amounts, such as via copayments, coinsurance and deductibles. Balance billing is prohibited; the provider and health plan are required to engage in a 30-day negotiation period, and if an agreement is not reached, the claim proceeds to independent dispute resolution arbitration, where the payment rate is determined.3
This Act also protects employees receiving nonemergency services at network facilities. When ancillary providers, such as anesthesiologists, radiologists, pathologists or laboratory services, operate out-of-network during an otherwise covered network procedure, they cannot balance bill patients. Air ambulance services from out-of-network providers are similarly protected.
These protections remove employees from the middle of payment disputes and limit their financial exposure to the Qualifying Payment Amount (QPA), which is generally similar to in-network rates but may not always be identical. For employers, this translates to reduced claims volatility in situations that previously generated significant balance bills.
Critical gaps that still create exposure
While the No Surprises Act addresses many surprise billing scenarios, important gaps remain. Ground ambulance services, which frequently operate outside health plan networks, are not covered by federal protections.4 Employees transported by ground ambulance may still face substantial balance bills.
Additionally, protections can be waived if employees provide written consent to receive nonemergency care from out-of-network providers.4 Situations involving referrals that inadvertently lead to out-of-network lab work, imaging or specialist consultations may also fall outside federal protections depending on the circumstances.
The financial impact of these remaining gaps can be significant. For example, if a lab health provider billed $2,371 while the health plan's allowed amount was $558, this would create a potential balance bill of $1,813.5
Strategic approaches to managing out-of-network charges
~2,800
The average amount that Naviguard has reduced out-of-network balance bills by6
Effective out-of-network cost management requires a multi-layered approach that combines regulatory protections with proactive employer strategies.
Education and transparency - Clear communication about network status, federal protections and remaining exposure areas helps employees make informed decisions. Specific education about services where out-of-network billing risk persists, such as ground ambulance transport, can prevent confusion and encourage employees to ask questions before receiving care.
Benefit design optimization - Plan designs that incentivize network utilization while providing transparent cost-sharing frameworks reduce both employee confusion and employer financial exposure. Employers may want to consider working with their insurer on prior authorizations for high-risk service categories.
Medical bill advocacy services - Specialized advocacy services can help review claims, identify billing errors and negotiate directly with providers to resolve inappropriate or inflated charges. These services prove particularly valuable for the out-of-network scenarios not covered by federal protections. For instance, since January 2021, Naviguard®, UnitedHealthcare’s primary out-of-network bill resolution service, has reduced out-of-network balance bills by an average of approximately $2,800 per case6 and achieved average savings of roughly 73% on billed charges for disputed or paid claims.7 Total employer savings from these efforts exceed $8B.6 Beyond direct cost reduction, advocacy services can ease administrative burden and improve employee experience by providing 1-on-1 guidance during complex billing situations.
Data analytics and pattern identification - Leveraging claims analytics helps employers identify utilization patterns, understand where out-of-network charges cluster and target mitigation efforts effectively. Combining analytics with advocacy services and employee education can enable a more effective approach to cost management.
Share
