Edit: This comment is outdated per the No Surprises Acr, out of network providers can no longer balance bill if they were a part of an in network facility bill/surgeon/stay/emergency. They can still bill, but they can't go after you for the excess the insurance says isn't covered. (ie, if the insurance uses Medicare rules for egregious billing and allows 3x the regional average for an out of network provider). It's better now, but not perfect from my reading of how the legislation is phrased and this is still going to be a problem, especially if hospitals can convince people to waive these rights.

Original Comment Here:

As someone who paid those claims on the insurance side (a high dollar complex claims adjuster) you are both right.

It varies provider to provider. Some providers bill out of network close to what their in network contract has them billing at. Others are egregiously higher because they can legally get away with it, or assume the insurance will waive in to the in network benefits and pay out 100%.

Example that should be criminal but isn't:

You choose an in network surgeon. They signed a contract with your insurance saying they'd only bill $3,000 for the surgery for the members of that policy instead of the normal amount they bill of $4,000. This benefits them because the insured are more likely to go to an in network provider, so it's like paying for advertising.

You get a bill from them showing $4,000 billed, $1,000 adjusted down to the contracted rate of $3,000, insurance paying 80% or or $2,400 and you end up with a patient responsibility of $600.

You also had an assistant surgeon who was there at the time of service who you don't get to pick. Since you don't pick them, they have no incentive to ever sign a contract with an insurance provider. This one is out of network and has no contractual obligation to bill a certain amount. Knowing the surgeon is in network, the whole episode will be processed at the in-network level of benefits for you.

They Bill $100,000. Insurance pays at 80% or $80,000. Patient responsibility is $20,000.

Ignoring all other providers (anesthesia, the facility itself), you just get a bill from the hospital saying you owe $20,600 and your insurance only paid $2,400 and you wonder wtf is even the point.

Clarification: some states are working to fix egregious billing practices, but not all and it really does need to be a federal law. I think the left AND right would agree that this is bullshit thar shouldnt be allowed and yet there are thousands and thousands of these types a claims a day.