Betty Chow, a Los Angeles resident, had a cervical disc replaced in August 2020 at a surgery center that was part of her Anthem Blue Cross PPO network.

Thirteen months later, she was blindsided by a bill for nearly $2,000 from the anesthesiologist who was on her surgical team but was not contracted with her PPO, or preferred provider organization.

Chow, a 35-year-old veterinarian, says she discussed the bill with her boyfriend, a registered nurse. He told her about a California law that took effect in 2017 and prohibits such “surprise bills” from out-of-network medical providers who work at in-network facilities.

Unfortunately, that law does not protect Chow or nearly 6 million other Californians who get health coverage through employers that pay employee medical bills out of their own treasuries. These “self-funded” plans are regulated by the U.S. Department of Labor — and thus are beyond the reach of state law.

But a federal law that took effect Jan. 1 bridges that gap for the more than 100 million people enrolled in such health plans across the United States, including those nearly 6 million Californians. And it covers millions more in the 32 states that have no laws against surprise bills or have laws offering only partial protection.

The new federal law, the No Surprises Act, also protects nearly 1 million Californians not covered by a 2009 California Supreme Court ruling that prohibits emergency room doctors and other providers of emergency services from billing HMO patients for out-of-network charges not paid by their insurers — a practice known as balance billing.

“Millions more Californians will now be protected against these bills that are not just unfair but put families’ economic security at risk,” says Anthony Wright, executive director of Health Access California, a consumer advocacy group.

It’s high time. Surprise bills have inflicted financial pain on millions of Americans for far too long.

When patients are seen by out-of-network providers they didn’t choose, it is often a double whammy: They pay more out-of-pocket — even if their health plan covers some out-of-network care — and they may later receive balance bills from providers that can total thousands of dollars.

Research shows that surprise bills are common among the nearly 200 million U.S. residents enrolled in private health plans.

A 2020 study found that 20% of privately insured patients who had elective surgery at a hospital that was in their insurance network received surprise bills from providers who were not. Bills from anesthesiologists averaged $1,219. Bills from surgical assistants averaged more than twice that amount.

“When patients pay their insurance premiums, they presume — and I believe fairly presume — that they will be covered financially,” says Katie Berge, director of federal government affairs at the Leukemia & Lymphoma Society.

The No Surprises Act covers all privately insured people in employer-sponsored and individual/family health plans. Medicare and Medicaid already protect their enrollees against nasty billing surprises.

The new federal law, which is largely in sync with California’s, bans balance billing for nonemergency care by out-of-network providers at in-network facilities and for most emergency room care at any facility. Insurers must cover those services at in-network rates, and providers may not bill patients for any amounts beyond that. Providers and health plans must negotiate how much the plan will pay, leaving patients out of the fray.

The federal law also protects against outlandish bills from out-of-network air ambulance services. A California law that took effect in January 2020 does the same thing. But it doesn’t cover the millions of people in federally regulated health plans and has been vulnerable to a possible legal challenge because it may conflict with the 1978 deregulation of airlines, which included air ambulances.

In cases where its provisions are stronger, the federal law will trump state laws.

What about enforcement? The federal government will defer to states in cases that involve state-regulated plans, and in those that involve federally regulated ones if the target of the complaint is a provider, says Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy. But the federal government will step in if states refuse or cannot enforce the law, he says.

Federal health officials are sending letters about enforcement to the governors of every state.

California, with its strong laws against surprise billing, certainly has the means and experience for enforcement, though it has not seen a huge number of cases. In the past four years, the Department of Managed Health Care has resolved 1,006 consumer complaints about balance billing, and 467 of them yielded total reimbursements of nearly $1 million to enrollees, says Rachel Arrezola, a department spokesperson.

Of course, not all bills that surprise patients are regulated by state or federal law. Sometimes people owe more than they thought on their deductible, or their cost sharing was higher than they realized, or their procedure wasn’t covered by their health plan, or the facility they chose wasn’t in their network.

So, bone up on your insurance policy. Know what and who it covers, which facilities are in the network, how much your out-of-pocket costs are, and how much of your deductible remains to be paid.

That will help you determine whether a bill is illegitimate. And there still will be illegitimate bills — because people make mistakes. And some medical professionals act in bad faith.

When you get a bill, don’t pay it right away. Ask questions. Compare it with the explanation of benefits you receive from your insurer — and if that hasn’t arrived yet, wait for it. If there’s a discrepancy between what your provider and your health plan say, call them both, and try to iron it out.

If that doesn’t work, don’t get discouraged. You can file a grievance with your health plan. And if that doesn’t resolve your problem, contact the Department of Managed Health Care to open an appeal, either on its website (www.healthhelp.ca.gov) or by calling 1-888-466-2219. The department also has a fact sheet that may answer some of your questions about California’s surprise billing law.

The federal government has launched a website (www.cms.gov/nosurprises) that may answer many of your questions about the No Surprises Act and will enable you to lodge a complaint or dispute a bill. You can also contact a federal “no surprises” help desk at 1-800-985-3059.

If you are simply befuddled by medical bills or lack the confidence to contest one on your own, the Health Consumer Alliance is a great resource. Find an office near you by going to www.healthconsumer.org or calling 1-888-804-3536.

Chow, a native of Hong Kong who has been a patient in the single-payer system there and in the United Kingdom, says she is baffled by the U.S. system, “where you pay for medical insurance, but then you have to pay more.”

Although California’s law does not protect her from the anesthesiologist’s $2,000 bill and the new federal law is not retroactive, she nonetheless appears to be headed toward a happy ending.

After three collection attempts by the anesthesiologist and several phone calls by Chow, Anthem agreed to knock the bill down to $83 and to update the anesthesiologist’s billing office. That still hasn’t happened, but Chow is hopeful.

“I don’t really understand what I’m responsible for,” she says, “except $83 is a lot less than $2,000.”

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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