Balance billing, also known as surprised billing, is when a healthcare provider bills you for the difference between what a provider charges and the amount insurance allows. For example, if your provider charges $200 and the allowed amount is $150, the provider may bill you the remaining $50. While this is legal in certain circumstances, a preferred provider cannot legally balance bill you for covered services. It is important for businesses who offer health insurance to understand the terms of their policies to prevent illegal balance billing practices.
Is Balance Billing Legal?
The rules surrounding balance billing are not always clear. While the practice is generally frowned upon, it is legal in certain situations. For example, balance billing is legal if you use a healthcare provider that does not contract with your insurance company. This is fairly common in concierge medical practices or if you choose to seek care outside of your insurance plan’s network. It is also legal if you choose to get services that are not covered by your health insurance policy, even if those services are provided by a healthcare provider that has a contract with your health plan.
However, in many cases balance billing is illegal. For example, the practice is illegal if you have Medicare and you are using a healthcare provider that accepts Medicare assignments. It is also illegal if you have Medicaid and your healthcare provider has an agreement with Medicaid. Another illegal practice occurs when your doctor or a hospital that has a contract with your health plan bills you for more than the contract permits. To determine if balance billing is illegal, it is important to review your state’s insurance laws and speak with an insurance professional about your unique circumstances.
How Balance Billing Works
Most people do not have to worry about balance billing. They see a provider or hospital in their network for services that are covered by their policy. The insurance company then pays the bill and all is well. However, when you fail to see a doctor or healthcare facility that is part of your insurance company’s provider network, that provider has the right to charge you whatever he or she wants to charge. This is because the provider is not bound to a specific rate with your health plan.
In some instances, your insurance company will agree to pay a percentage of any out-of-network care that you receive. However, this does not mean that the insurance company will pay a percentage of the amount that is actually billed. Instead, they will pay a percentage of the amount that they believe should have been billed based on data gathered on average rates for certain services. There may be a balance left after the insurance company covers their portion of the bill. The patient is then responsible for paying this balance.
When Does Balance Billing Happen?
Balance billing most commonly occurs when a patient chooses to receive medical care from a healthcare provider or hospital that is not part of their health plan’s network. It also occurs if a patient sees a provider that does not accept Medicare payments as payments in full. If a patient sees a provider that has opted out of Medicare, it is the patient’s responsibility to pay the bill in full.
However, If the provider does take Medicare but does not accept assignments with Medicare, the patient may be responsible for up to 15 percent more of Medicare’s allowable charge. In addition, the patient will still need to pay his or her regular deductible and coinsurance payments.
Unexpected Balance Billing
While most patients try to remain in-network to avoid issues like balance billing, it can still happen, sometimes unexpectedly. For example, you may visit an in-network healthcare facility but see a provider that is not in your network. While you may not see this person directly, they could play a part in your care, such as a radiologist that reads your x-rays.
If a healthcare professional does not have a contract with your insurance company, you could end up paying the bill. This can occur with certain professionals like anesthesiologists, neonatologists, pathologists, hospitalists, and ER doctors.
How to Handle an Unexpected Balance Billing Issue
Most people do not know how to handle the situation when receiving a balance bill. Medical bills can be substantial and add up quickly, especially if the patient suffers from a chronic illness or condition. As balance bills are often unexpected, the arrival of one in your mailbox could leave you financially strained. The first thing you will want to do after receiving a balance bill is to determine if it is legitimate. In some cases, the balance bill may be a mistake, especially if you know that the provider you saw was in your network and the services rendered were covered.
If the bill is not an error, it is important to determine what went wrong. Some people may make the mistake of seeing a provider that they thought was in-network but turned out to be out-of-network. If you received care without knowledge that the provider was out-of-network and the professional works at an in-network facility, contact your state’s insurance department to determine if any consumer protections exist that could potentially cover your situation. If all else fails, the provider may negotiate a reduced amount meaning you will still need to pay the bill but at a lower cost.
New Virginia Laws Around Balance Billing
The Virginia General Assembly recently passed legislation that guarantees that when a patient receives emergency services from an out-of-network provider, they are not required to pay more than the applicable cost-sharing requirement as if they were treated by an in-network provider.
The payment for the services also must be reasonable based on comparing payments for the same or similar services in the geographic area. If the out-of-network and in-network providers can’t agree on a payment, it must be resolved by the Virginia State Corporation Commission.
Receiving Assistance from a Benefits Consultant
It is not unusual for patients to receive surprise balance bills from their providers with inflated prices after receiving care from an out-of-network provider that they assumed was in their network. As an employer that offers health insurance to your workers, it is important to understand how balance billing works and what you can do to help avoid these extra expenses.
For more information regarding the common question, “what is balance billing?” or to acquire help with employee benefits like health insurance, contact the employee benefits professionals at Business Benefits Group.