Insurance Companies, Do Your Job
Public perception is shaped by those who speak the loudest, not always by those who understand the system best. That dynamic has played out repeatedly in the conversation around surprise medical billing. Much of the public discourse places blame on healthcare providers, often without acknowledging how medical billing actually works or who controls the rules of payment.
This article is written for healthcare providers, administrators, and industry professionals who are frustrated by that narrative. It explains what surprise medical billing really is, why providers are often blamed unfairly, and how insurance company policies create the conditions that lead to unexpected patient bills.
What Is Surprise Medical Billing?
Surprise medical billing occurs when a patient with active health insurance receives medical care, believing their insurance will cover the cost, only to later discover that the insurer paid little or nothing. The remaining balance is then billed to the patient, often weeks after care was provided.
In public discourse, this situation is frequently attributed to providers choosing to remain out of network in order to charge higher rates. That explanation relies on several faulty assumptions about how medical billing, insurance contracting, and provider decision-making actually work.
To understand where the process breaks down, it helps to look at the responsibilities of each party involved. The patient’s role is to maintain active insurance coverage by paying premiums. The provider’s role is to deliver medically necessary care and submit claims to the insurer. The insurance company’s role is to pay for covered services according to the policy the patient purchased.
When coverage is active, care is delivered in good faith, and payment does not follow, the failure does not occur at the provider level.
Why Healthcare Providers Are Not the Cause of Surprise Bills
The idea that providers intentionally surprise patients with large bills depends on a series of assumptions that do not reflect reality. Among the most common misconceptions are beliefs that insurance companies will contract with any provider who asks, that providers control patient cost-sharing amounts, and that all services performed in a hospital are automatically covered under hospital insurance contracts.
In practice, none of these assumptions holds true. Providers do not set insurance benefit designs, deductible amounts, or out-of-network payment rules. They also do not control which insurance plans a patient carries or which products an insurer introduces in a given year. What providers do control is the delivery of care, often under ethical and legal obligations that require treatment regardless of a patient’s insurance status or ability to pay.
After decades of billing experience across hundreds of providers, it is exceedingly rare to see a provider deliberately avoid contracting in order to bill patients directly. That approach would be financially unsustainable, as patients are far less likely to pay large, unexpected balances than contracted insurers are to pay negotiated rates.
How Medical Billing Actually Works (And Why It’s So Unusual)
Medical billing is fundamentally different from billing in most other industries. Providers deliver services first, then attempt to collect payment afterward through third-party payers with complex, ever-changing rules.
A useful way to understand this complexity is to imagine another industry operating the same way. If grocery stores functioned under the medical billing model, customers would leave with groceries after presenting insurance information, and the store would later attempt to collect payment from third parties that may or may not pay. Any unpaid balance would then be billed back to the customer weeks later. In that scenario, it would seem absurd to blame the grocery store for expecting to be paid.
Yet that same logic is routinely applied to healthcare providers, even though they operate under a system they did not design and cannot control.
How Risk Shifted From Insurance Companies to Providers
Historically, patients paid providers directly and sought reimbursement from insurers themselves. As insurers made reimbursement more complex, providers stepped in to submit claims on patients’ behalf. What began as a courtesy gradually became the standard operating model.
Over time, insurers added layers of administrative requirements, prior authorizations, and medical necessity determinations, shifting more financial risk onto providers. Outcome-based payment models further increased this burden by tying reimbursement to results influenced by factors outside a provider’s control, such as patient compliance, lifestyle, and comorbidities.
Insurance companies are designed to pool risk across large populations of healthy and sick members. Providers, by contrast, treat primarily sick patients and have no mechanism to spread risk in the same way. Expecting providers to absorb financial risk for systemic insurance decisions misunderstands the purpose of insurance itself.
Why “Just Be In-Network” Is Not a Real Solution
A common suggestion is that providers should simply contract with every insurance company to avoid out-of-network situations. In reality, this is neither feasible nor allowed in many cases.
The sheer volume of insurance entities also makes universal contracting impossible. Thousands of payers operate across different markets, each with unique contracts, renewal cycles, and reimbursement structures. No small or mid-sized practice could realistically manage that level of administrative overhead.
Why Surprise Billing Legislation Often Favors Insurers
This removes the last remaining leverage providers have in contract negotiations and allows insurers to dictate payment terms without consequence. When insurers can impose rates unilaterally, they gain even greater control over medical decision-making, reimbursement levels, and provider viability.
A system that allows one party to avoid payment obligations while setting the terms for everyone else is neither competitive nor sustainable.
The Real Solution to Surprise Medical Billing
Surprise medical billing is not the result of provider greed or bad faith. It is the outcome of insurance companies refusing to contract broadly, creating restrictive benefit designs, introducing new plans without provider inclusion, and shifting financial risk downstream.
A more logical solution would require insurers to honor coverage commitments, contract transparently, and assume the risk they were designed to manage. Until that happens, providers will continue to navigate a system that places them at odds with patients for failures they did not create.
Frequently Asked Questions About Surprise Medical Billing
Why do surprise medical bills happen even at in-network hospitals?
Many physicians working in hospitals are independent providers, not hospital employees. Even if the hospital is in network, individual providers may not be contracted with the patient’s insurance plan.
Can providers tell patients exactly what they will owe before treatment?
In most cases, no. Patient responsibility depends on insurance benefit design, deductibles, plan-specific rules, and how claims are processed after services are rendered.
Why don’t providers just refuse out-of-network patients?
Providers are often legally and ethically obligated to treat patients based on medical need, particularly in emergency and hospital-based settings. They frequently have no control over which patients they see.
Do insurance companies have to contract with providers who request it?
No. Insurers can and do limit network participation, leaving providers unable to become in network even when they want to.
How can practices protect themselves from billing-related financial risk?
Strong revenue cycle management, accurate coding, contract analysis, and experienced billing support are critical for navigating insurer requirements and minimizing unpaid claims.
How MBA Medical Helps Providers Navigate a Broken System
Surprise medical billing is a symptom of a larger problem in healthcare reimbursement. Navigating that system requires deep expertise, constant vigilance, and an understanding of how insurers actually operate.
MBA Medical has spent more than 35 years helping providers manage billing complexity, reduce financial risk, and recover revenue in an environment that often works against them. By handling medical billing, revenue cycle management, credentialing, and related services, we allow providers to focus on patient care while ensuring their work is paid accurately and fairly.
If your practice is struggling with denied claims, out-of-network challenges, or increasing administrative burden, experienced billing support can make the difference between constant frustration and financial stability.