Most enrollees with private health insurance are covered under some type of managed care organization (MCO), either a health maintenance organization (HMO) or a preferred provider organization (PPO). MCOs have networks of providers with whom they have negotiated reimbursement contracts. Enrollee of these MCOs take comfort in believing that if they follow the MCO rules they will not face costs greater than their premium and required cost sharing (copayments, deductibles, and co-insurance).

Balance billing describes the situation where a provider seeks to collect from a MCO enrollee the difference between the provider’s billed charges for a service and the amount that a MCO paid on that claim.

Essentially all contracts between participating providers and MCOs (HMOs and PPOs) include a “hold harmless” provision that protects enrollees from being balance billed by a network provider for covered services. In consenting to these provisions, participating providers generally agree not to seek reimbursement from an enrollee beyond payment of applicable cost sharing requirements such as copayments, co-insurance or deductibles for services covered by the HMO.

In most states, "hold harmless" provisions are required by state law to be included in contracts between HMOs and participating providers. States may also require this type of language in contracts between providers and PPOs. To date, very few have passed laws directly restricting out-of-network providers from balance billing MCO enrollees.

This chart presents state requirements, such as “hold-harmless” provider contract requirements, that are understood to directly restrict providers from balancing billing MCO enrollees. It does not reflect state restrictions that do not specifically restrict provider from balance billing an enrollee but ultimately may work to limit an enrollees liability beyond typical cost sharing requirements. For example, Colorado law requires that if a MCO does not maintain an “adequate” network, then the MCO must arrange for an enrollee to see an out-of-network provider at no greater cost than if the enrollee had been treated by a network provider. A separate state law requires that enrollees of a MCO, when receiving care from an out-of-network provider at a network facility, must be “held harmless” by the MCO (i.e not the provider) for costs above those that they would otherwise face had they been treated by a network provider. Under CO state insurance law, there is no explicit rule against an out-of-network provider balance billing an enrollee, but since the enrollee must be held harmless, the MCO is essentially responsible for resolving the bill before the provider pursues action against the enrollee thus precluding a balance bill. Typically, the MCO either pays the billed charges or comes to an agreement with the provider for less. For a detailed summary of state laws that restrict the practice of balance billing, see http://www.chcf.org/publications/2009/04/unexpected-charges-what-states-are-doing-about-balance-billing.

Data compiled through review of federal and state laws. Data collection and analysis by researchers at the Health Policy Institute, Georgetown University. Data as of January 2010.

1. In California, only MCOs (HMOs and PPOs) licensed by the California Department of Managed Health Care (DMHC) must include "hold harmess" in provider contracts.
2. In California, out-of-network providers are prohibited from balance billing enrolles of MCO (HMOs and PPOs) licensed by the California Department of Managed Health Care (DMHC) for emergency services.
3. In Connecticut, state law specifies that “it shall be an unfair trade practice for any health care provider to request payment from an enrollee, other than a copayment or deductible, for medical services covered under a managed care plan.”
4. In Delaware, out-of-network providers are prohibited from balance billing HMO enrollees for 1) certain "emergency care services" 2) medically necessary covered services "not available through network providers" and 3) medically necessary covered services not available "within a reasonable time period."
5. In Florida, in general, out-of-network providers may not balance bill an HMO enrollee when an HMO is liable for the services rendered, that is, any service covered and authorized by the HMO. When services are provided for an emergency condition or to evaluate if such a condition exists, a separate law makes the HMO liable and restricts the non-network provider from balance billing the enrollee.
6. Hospital provider contracts must have a hold harmless clause. There is no such requirement for other providers.
7. In Illinois, considering HMOs, providers of emergency transportation by ambulance agrees not to seek any payment from the enrollee for services provided to the enrollee.
8. In Maryland, out-of-network providers may not balance bill an HMO enrollee for a “covered service.” In general, a “covered service” is one authorized under the terms of a contract. Emergency care and out-of-area urgent care are generally considered covered services.
9. In New York, out-of-network providers of ambulance services are restricted from balance billing enrollees of HMO and PPOs, among other insured. In addition, acute care hospitals are restricted from balance billling HMO enrollees for "end of life" cancer care.
10. In Rhode Island, no enrollee is liable to any provider for charges for covered health services, except for amounts due for co-payments, when provided or made available to enrolled participants by a licensed health maintenance organization during a period in which premiums were paid by or on behalf of the enrollee.
11. In West Virginia, HMO enrollees are not liable to any provider of health care services for any services covered by the health maintenance organization if at any time during the provision of the services, the provider, or its agents, are aware the subscriber is a health maintenance organization enrollee.