What Is Balance Billing in Health Insurance?

Balance billing in health insurance can result in unexpected medical bills. This occurs when a healthcare provider charges a patient for the difference between the total cost of services and the amount their insurance plan pays. In-network providers accept the insurer’s payment as full compensation, but out-of-network providers may bill the patient for the remaining balance.

How Balance Billing Occurs

Balance billing arises when a patient receives care from a provider outside their health insurance plan’s network. The out-of-network provider may bill the patient for the unpaid remainder after the insurance company pays its portion. This can lead to higher out-of-pocket costs.

Surprise balance billing often happens when patients have little control over their provider choice. For example, during an emergency, a patient might be taken to an in-network hospital but receive care from an out-of-network physician, such as an anesthesiologist or radiologist. Ancillary services like laboratory tests or ambulance rides, even with an in-network hospital visit, could also involve out-of-network providers.

Federal Laws Protecting Consumers

The No Surprises Act (NSA) provides federal protections against surprise medical bills. Effective January 1, 2022, the NSA generally prohibits balance billing for emergency services, non-emergency services from out-of-network providers at in-network facilities, and air ambulance services. Patients are only responsible for their in-network cost-sharing amounts, such as copayments, deductibles, and coinsurance. Their health plan pays any additional costs directly to the out-of-network providers.

The NSA requires healthcare providers to give uninsured or self-pay patients a “Good Faith Estimate” of expected charges for scheduled services. This estimate details anticipated costs. If the final bill is substantially higher than the estimate, patients can dispute the charges. The NSA also establishes an independent dispute resolution (IDR) process for providers and insurers to settle payment differences for out-of-network charges, ensuring patients are removed from these billing negotiations.

While the NSA offers broad protections, there are specific circumstances where patients can choose to waive these protections. For certain non-emergency services received from an out-of-network provider at an in-network facility, or for post-stabilization services after an emergency, providers can ask patients to sign a notice and consent form. This form informs patients about potential out-of-network costs and allows them to agree to waive their NSA protections. However, patients are never required to sign this form or choose out-of-network care, and balance billing protections cannot be waived for emergency care, unforeseen services, or certain ancillary services like anesthesia or radiology.

State Laws Protecting Consumers

Many states have implemented their own laws to address balance billing, which can complement or expand upon the federal No Surprises Act. These state-specific protections might cover different types of services, providers, or insurance plans than the NSA. For instance, some state laws may apply to ground ambulance services, which are not universally covered by the federal law. State regulations can also have broader definitions of emergency care or establish unique dispute resolution processes.

State laws often provide protections for patients with state-regulated health plans, which differ from federally regulated self-funded plans primarily covered by the NSA. These laws may prohibit balance billing in scenarios where consumers had no choice of provider, such as during emergencies or when an out-of-network provider treats them at an in-network facility. Therefore, understanding one’s state’s specific regulations is important, as they can offer additional layers of protection against unexpected medical bills.

Steps to Take When You Receive a Bill

Receiving a medical bill you suspect is a balance bill requires careful attention and a systematic approach. Begin by thoroughly reviewing the bill to confirm accuracy, checking provider names, dates of service, and ensuring the services listed were indeed received. Request an itemized invoice if the bill is not detailed. Identifying whether the provider was in-network or out-of-network for the specific service is a foundational step.

Next, contact your health insurance company by calling the number on your member identification card. Discuss the bill with them to clarify what was paid, why certain amounts were or were not covered, and whether the bill falls under balance billing protections. Your insurer can help determine if the bill is legitimate under your plan’s terms and applicable laws.

Concurrently, reach out to the healthcare provider’s billing department. Explain that you believe the bill constitutes balance billing and inquire if it is covered by the No Surprises Act or any relevant state laws. Many providers are willing to negotiate payment plans or adjust charges. Do not make full payment until the bill’s legitimacy is confirmed and any dispute process is initiated.

If direct communication with the insurer and provider does not resolve the issue, consider filing a formal complaint with the appropriate regulatory body. For potential violations of the No Surprises Act, you can contact the federal No Surprises Help Desk. Additionally, your state’s department of insurance or attorney general’s office may handle complaints related to state-specific balance billing laws. These agencies can investigate the complaint and help determine if the provider must adjust their charges.