Surprise medical bills and cash prices: what to check before you pay

Reviewed by a board-certified physician.

If you think you may be having a medical emergency, call 911.

A medical bill can be wrong, protected from balance billing, or simply hard to read. A cash price can also look lower than an insurance price while covering a different set of services. Break the problem into four questions. What did the provider charge? What did your plan process? What does the law protect? What price or financial-assistance rule applies if you are paying without insurance?

The short version

• The federal No Surprises Act protects many insured patients from certain out-of-network bills for emergency services and certain care tied to an in-network facility.
• Texas has its own surprise-billing protection for people with state-regulated coverage in emergencies and specified no-choice situations.
• If you are uninsured or choose not to use insurance, you can usually ask for a Good Faith Estimate before scheduled care.
• CMS says the federal patient-provider dispute process can apply when a bill is at least $400 above the Good Faith Estimate and the other eligibility rules are met.
• Hospitals must publish standard charges online, including a machine-readable file with discounted cash prices and negotiated charges.
• “Discounted cash price” means the hospital's charge for a person paying cash or a cash equivalent; it is not automatically your final all-in cost.
• Before paying a disputed bill, compare it with the explanation of benefits. Ask for an itemized bill and use the complaint path for the regulator that oversees your plan.

What the federal No Surprises Act does

The federal No Surprises Act took effect in 2022. CMS explains that it protects people with most types of private health insurance from certain unexpected out-of-network bills. The main situations include emergency services. The law also covers certain non-emergency services from out-of-network providers at an in-network hospital, hospital outpatient department, or ambulatory surgical center. It also includes federal protections for air ambulance services.

The key idea is balance billing. Without protection, an out-of-network provider can sometimes bill the patient for the gap between the provider's charge and what the plan recognizes. In protected situations, the law limits that practice and keeps the patient out of the provider-plan payment fight.

The law does not erase normal cost sharing. You can still owe the in-network deductible, copayment or coinsurance that applies under your plan. The protection is about the unexpected out-of-network balance, not about making care free.

Texas has a separate layer of protection

Texas law also protects many people with state-regulated health plans. TDI says Senate Bill 1264 bans balance billing in qualifying emergencies. It also protects specified care at an in-network facility when the patient did not have a meaningful choice of provider.

Texas protections for qualifying emergency care began in 2020. Federal protections expanded the national baseline in 2022. Which route handles a problem depends on your plan. TDI says state-regulated insurance cards generally show “TDI” or “DOI.” Some employer plans are self-funded and follow federal rather than Texas insurance regulation.

If you receive an out-of-network bill you did not expect, do not assume either that it is valid or that it is automatically illegal. Compare the bill with your explanation of benefits and ask the health plan how it processed the claim. If the plan should have treated it as protected emergency or no-choice care, use the appeal or complaint process that applies to that plan.

Paying yourself: the Good Faith Estimate

If you do not have insurance or choose not to use it for scheduled care, federal rules give you a different tool: the Good Faith Estimate. CMS says providers generally must give uninsured or self-pay patients an estimate when care is scheduled at least 3 business days in advance. You can also ask for an estimate.

Save the estimate. It gives you something concrete to compare with the final bill. If the bill from a provider or facility is at least $400 more than that provider's Good Faith Estimate, the federal patient-provider dispute process may be available. CMS says the dispute generally must be started within 120 calendar days of the date on the initial bill, and other eligibility rules also apply.

A Good Faith Estimate is not a guarantee that nothing can change. It is a formal pre-service estimate with dispute rights attached. If the planned service changes, ask for an updated estimate when practical.

Reading hospital price-transparency files

Hospitals subject to federal price-transparency rules must publish standard charges online. CMS requires a machine-readable file containing categories that include gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges.

A machine-readable file is built for computers and can be enormous. It is not a simple menu. Start with the hospital's consumer price tool or shoppable-service display when one is available. Use the machine-readable file when you need the underlying charge data.

CMS defines the discounted cash price as the hospital charge that applies to a person who pays cash or a cash equivalent. That does not mean it includes every professional bill, laboratory bill, imaging interpretation or other separately billed service connected to your visit. Ask what the quoted price includes before comparing one facility with another.

Insurance prices and cash prices answer different questions. If you have insurance, ask the plan whether a cash payment would count toward your deductible or out-of-pocket totals before you bypass insurance just because the posted cash number looks lower.

Before you pay a bill that looks wrong

Start with the explanation of benefits from your health plan. It should show what was billed, what the plan allowed, what the plan paid and what it says you owe. The explanation of benefits is not itself a bill, but it is the map for checking the bill.

Ask the provider for an itemized bill if the statement is too vague to understand. Compare dates, service descriptions and amounts with the explanation of benefits. If something is duplicated or unfamiliar, ask the billing office to explain it before you pay.

For a Texas-regulated plan, TDI has an online health-insurance complaint process. TDI explains that it handles complaints about insurers and plans it regulates, not complaints about the medical judgment of a provider. If the plan is not regulated by TDI, use the regulator or federal route named in your plan documents.

Financial assistance and charity care

A large bill is not always the final amount a patient must pay. CMS says nonprofit hospitals must provide financial assistance to eligible patients who cannot afford their bills. Hospitals publish financial-assistance policies that explain eligibility and how to apply. “Charity care” is a term some organizations use for this help.

Ask for the policy, not just a payment plan. A payment plan spreads a bill over time; financial assistance can change the amount owed if you qualify. If you are uninsured, underinsured, or facing a bill that is difficult to pay, review the hospital's written policy before agreeing to long-term payments.

Before you go

• Save Good Faith Estimates, explanations of benefits, bills and any network-status screenshots in one folder.
• Ask what a cash quote includes and which services may bill separately.
• Do not treat a machine-readable hospital charge as a guaranteed final price.
• If a surprise bill looks protected, ask your plan how it processed the claim and use the correct state or federal complaint path.
• Ask a hospital for its written financial-assistance policy before assuming the full billed amount is final.

Sources

• Centers for Medicare & Medicaid Services, medical bill rights and No Surprises Act (https://www.cms.gov/initiatives/your-patient-rights/medical-bill-rights)
• CMS, rights for people without insurance or who self-pay (https://www.cms.gov/initiatives/your-patient-rights/medical-bill-rights/know-your-rights/without-insurance)
• CMS, Hospital Price Transparency (https://www.cms.gov/priorities/key-initiatives/hospital-price-transparency/hospitals)
• CMS, discounted cash price definition (https://www.cms.gov/newsroom/fact-sheets/hospital-price-transparency-enforcement-updates)
• CMS, medical bill financial assistance (https://www.cms.gov/initiatives/your-patient-rights/medical-bill-rights/get-help/guides-resources/apply-financial-assistance)
• CMS, checking a medical bill for errors (https://www.cms.gov/initiatives/your-patient-rights/medical-bill-rights/get-help/guides-resources/check-your-bill-errors)
• CMS, reading an Explanation of Benefits (https://www.cms.gov/initiatives/your-patient-rights/medical-bill-rights/get-help/guides-resources/read-explanation-benefits)
• Texas Department of Insurance, surprise billing FAQ and help (https://www.tdi.texas.gov/medical-billing/faq.html; https://www.tdi.texas.gov/consumer/cpmmediation.html)
• Texas Department of Insurance, health-insurance complaint process (https://www.tdi.texas.gov/consumer/file-health-cmplnt.html)
• 911.gov, Using 911 (https://www.911.gov/)

En español

Si una factura médica le parece inesperada, primero sepárela en partes: lo que cobró el proveedor, lo que procesó su plan, lo que usted debe según la explicación de beneficios y si existe una protección contra facturación de saldo. La ley federal No Surprises Act y la ley de Texas protegen a muchas personas en ciertas situaciones de emergencia o cuando no pudieron elegir al proveedor fuera de la red. Si usted no tiene seguro o decide pagar por su cuenta, normalmente puede pedir un Good Faith Estimate antes de una atención programada; guárdelo para compararlo con la factura final. Los hospitales también deben publicar información de precios, incluida la tarifa descontada en efectivo, pero esa cifra no siempre incluye todos los profesionales o servicios que pueden facturar por separado. Antes de pagar una factura dudosa, pida una factura detallada, compárela con la explicación de beneficios y revise la vía de queja correspondiente. Si el monto es difícil de pagar, pida la política escrita de asistencia financiera del hospital y revise si usted cumple los requisitos.

The HERE Health team

Lea la página completa en español.

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