Healthcare providers increasingly face a costly and all-too-common reality: when an insured patient’s coverage touches multiple state lines, insurers often engage in “finger pointing,” leaving the provider asking, “Who do I submit the claim to?” While insurers find ways to delay payment by creating confusion over which entity bears responsibility, providers bear the financial burden. They are left providing care and services without having anyone to bill, despite being in-network.
How Finger Pointing Happens
At its core, finger pointing stems from ambiguity over which payor bears primary responsibility for a claim. That ambiguity can arise from any combination of overlapping policies, coordination-of-benefits (COB) rules, network tiering, delegated risk arrangements, or differing state regulatory frameworks. In a multi-state environment, these fault lines are magnified. A patient may have an employer-sponsored plan issued in State A, reside or receive care in State B, and also carry secondary coverage (e.g., Medicare, Medicaid, a marketplace plan, TRICARE, or a student plan). Each program or policy has distinct eligibility, benefit, and COB rules. When data is incomplete or policies are not aligned, coverage entities default to denial, pending status, or partial adjudication, leaving providers uncertain whom to bill and in what sequence.
This issue frequently arises in out-of-network and out-of-area scenarios involving reciprocal network arrangements. In these arrangements, one plan (often referred to as the “home plan,” i.e., the plan that issued the policy) may defer responsibility to another plan operating in the state where care is actually delivered (the “host plan”). The host plan, in turn, may contest contractual rates, medical necessity protocols, or the patient’s eligibility at the time of service. Neither plan treats the claim as its own, and the resulting impasse leaves the provider without a clear path to reimbursement. Unlike disputes over underpayment or coding, where the provider at least knows which entity to engage, multi-state finger pointing often means there is no single counterparty willing to accept and adjudicate the claim at all.
Consequences for Providers
For providers, the financial consequences are immediate and compounding. Accounts receivable increase, staff time is diverted to chasing down denied claims, and the practice is left to navigate multiple appeal portals across different payors and states. At some point, the cost of pursuing a claim exceeds the likely recovery, and practices—especially small ones—end up simply writing off the balance. While this may seem insignificant with one or two claims, the impact on practices whose claims are routinely run through this process can be devastating. Consider, for example, a specialist practice that treats a high volume of patients from neighboring states: if even a modest percentage of those claims become mired in finger-pointing disputes, the practice may face tens or hundreds of thousands of dollars in delayed or unrecovered revenue over the course of a year.
Contracting and Regulatory Levers and Solutions
Contract language can mitigate finger pointing by clarifying responsibility and timelines. However, there are times when insurers will continue to deny a claim despite what appears to be clear language in the contract. For out-of-area programs, contracts should address which rate applies and who pays when host and home plans disagree and should require data sharing sufficient to determine primacy without repeated provider resubmissions. But what happens when neither the host nor the home plan is willing to pay, leaving the provider in a loop of appeals?
Leveraging applicable law and the language of the provider-payor contract may assist in mitigating provider issues related to multi-state insurance. The challenge unique to multi-state finger pointing, however, is determining which state’s laws govern and which regulatory body has jurisdiction when multiple states are involved. Many states have clean-claim statutes (laws requiring payors to process properly submitted claims within a specified timeframe), prompt-payment laws, unfair claims practices acts, and grievance processes that prohibit unreasonable delays, shifting of burdens to providers, or refusal to coordinate. When coverage spans multiple states, a provider may need to evaluate the regulatory frameworks in each relevant jurisdiction to identify which obligations apply to which payor, and whether a complaint should be directed to one state’s Department of Insurance or another’s.
It is important to note, however, that these state-law remedies may be limited where the patient’s coverage is provided through a self-funded employer-sponsored plan governed by the Employee Retirement Income Security Act (ERISA). ERISA broadly preempts state insurance laws as applied to self-funded plans, which can significantly narrow the regulatory tools available to providers and further compound the finger-pointing problem.
An experienced attorney can help navigate contracts related to multi-state insurance to assist a provider in avoiding or mitigating the finger-pointing issue. Moreover, if a provider is facing an abundance of claim denials where the home and host plans disagree as to who is responsible for payment, an attorney can assist in leveraging regulatory avenues to either clarify the obligations under the contract and applicable law, or to obtain a potential settlement seeking reimbursement for interest, payment in full for clean claims, or amendments to contract terms to alleviate the problem.
How Frier Levitt Can Help
Frier Levitt attorneys regularly assist providers in untangling multi-state coverage disputes—from identifying which payor bears primary responsibility under applicable contracts and regulations, to pursuing claims through the appropriate state or federal channels when coordination breaks down. If your practice is experiencing a pattern of claim denials or payment delays tied to multi-state finger pointing, contact us today to see how we can best assist you.
Senior Associate
Senior Associate
