STATE VS. FED

---

When it comes to surprise medical billing protections, not all states operate under the same rules. Some states have their own comprehensive “friendly” Surprise Bill Laws, while others fall under the federal No Surprises Act (NSA) framework. Understanding the difference is important for providers, facilities, and payers navigating reimbursement and dispute resolution.

Certain states enacted their own surprise billing protections before the federal law took effect in 2022. These states continue to operate primarily under their state-specific frameworks for fully insured health plans regulated by the state.

In general, “friendly” state laws may:

• Use payment standards tied to billed charges, usual & customary rates, or arbitration trends
   
• Offer dispute resolution processes that some providers view as more favorable than the federal system
   
• Apply different timelines and procedural rules
   
• Cover only fully insured plans (not self-funded ERISA plans)
   

Because insurance regulation is largely state-based, these laws often apply when:

• The patient’s health plan is fully insured and regulated by that state
   
• The state’s law is not preempted by federal law
   

For providers, these states may offer more predictable or historically higher reimbursement methodologies compared to the federal benchmark approach.

In states without their own comprehensive surprise billing law, the federal No Surprises Act governs the process.

The federal NSA applies broadly to:

• Self-funded (ERISA) plans in all states
   
• Fully insured plans in states without applicable state laws
   
• Air ambulance services nationwide
   

Key characteristics of the federal system include:

• Payment disputes resolved through Independent Dispute Resolution (IDR)
   
• Heavy emphasis on the Qualifying Payment Amount (QPA), generally the median in-network rate
   
• Structured batching rules and strict filing timelines
   
• Federal oversight rather than state arbitration panels
   

The primary difference comes down to who controls the rules and how payment disputes are evaluated:

• In “friendly” state law states, reimbursement and arbitration are governed by state-specific statutes and processes.
   
• In federal NSA states, the standardized federal IDR process and QPA framework apply.
   

It’s also important to note that even in states with their own laws, the federal NSA still applies to self-funded health plans and certain services. As a result, providers in “friendly” states often operate under a hybrid system depending on the patient’s plan type.