Balance billing is when you receive a bill for the balance, what remains of a charge by an out-of-network provider after what your health insurance covers.
There should be NO balance billing if you use an in-network provider because those providers have contracts with the insurance company that determines how much they’re paid.
On the other hand, this does not mean that you will not pay anything if you use an in-network provider. Since most health insurance plans are charging consumers more in the areas of deductibles, co-payments, co-insurance payments, the top way consumers pay out cash, even when you use a provider you can be liable for some cash payment. For instance, in the case of all services that are covered at less than 100 percent by your plan, you will have to pay cash, pay to play style for whatever service you’re using.
Balance billing is not the term usually used for the amount you pay in cash when using an in-network provider, those amounts go under one of the cash payments whether it’s deductible, co-payment (like when it says $10 per visit) or co-insurance (like when it says 30 percent co-insurance, that means you pay 30 percent of the bill).
Balance billing is usually reserved for the amounts you pay when you use an out-of-network provider, those healthcare providers that do NOT have an agreement with your health insurer. Logically, you can understand how this makes sense.
If you see a provider who is not part of your plan, they have a “going rate,” what they charge to people. They don’t care about what your plan covers because they have no relationship with your insurance plan. You are responsible for their bill and your plan’s provisions for payment of the out-of-network service will merely reduce that bill. For instance, if your health insurance plan provides for 50 percent coverage of an out-of-network service then the provider will bill you for the other 50 percent, which is the balance you owe.
In some ways balance billing is the most direct consumer transaction with healthcare providers because it occurs outside of your health insurance plan, you don’t have to worry about any of the hoops your plan makes you jump through such as pre-approval or whether or not they give you the go ahead for the service or if they give you the go-ahead to see the provider, you simply have to see the provider and pay the provider for the service you receive. (Note: If you know that a provider is likely to be out-of-network then communicating with your health insurance plan ahead of time can help you establish that you put forth your best effort to work in-plan.)
So why the push for balance-billing legislation that limits the practice of balance billing in certain instances? Because in some situations such as in a hospital setting or where a health insurance plan offers too few or inadequate provider choice, patients are in a very real sense given no choice but to use an out-of-network provider.
The Kaiser Family Foundation has a good chart that lists balance billing policy by state, in an article entitled, “State Restriction Against Providers Balance Billing Managed Care Enrollees,” http://kff.org/private-insurance/state-indicator/state-restriction-against-providers-balance-billing-managed-care-enrollees/.
Only 13 states have any sort of meaningful restriction on balance billing. As consumers, naturally, we want to end all balance billing, but realistically this would never occur because health plans want to control their costs by keeping patients using in-network providers and because healthcare providers want to charge as much as they can for their services.
But if your state does not have balance billing prohibitions, what can you do if you are in the situation where your health plan’s provider choices are inadequate or if you are given no choice because hospitals arrange staffing of supporting personnel and services during your hospital stay?
The first thing to do is to communicate as much as possible with both your health insurance company and the hospital, especially before, but even after you begin obtaining services that your intention is to use in-network providers. Frequently and in writing if you can, this communicates your intention.
Make sure your health plan covers everything they should by filing appeals for balance bills. Then call the provider who is charging you and see if they will settle for a smaller amount. Notify the State Insurance Department and make a consumer complaint if applicable to your State Attorney General.
Fighting balance billing is a legitimate consumer concern and is worth your attention. On the political side, if your state is not one of the 13 states addressing the issue in a meaningful way, you should support or initiate efforts for your state to address the issue.
