Balance billing is when your hospital or doctor (healthcare provider) bills you for the difference, or balance, between the provider’s normal fee for a health service and what your insurance company has agreed to pay in a contract with your provider.
It’s a growing problem.
Say you accidentally sever a finger in a table saw accident. You need emergency care. An out-of-network plastic surgeon reattaches the finger. The cost is $83,000, but the normal rate for the procedure was only $21,000. You find a bill for $62,000 in your mail. In many states, this out-of-network charge is not illegal.
It sometimes happens when your health plan pays less than what your in-network doctor or hospital normally charges, and your healthcare provider wants you to pay the rest of the bill. Maybe your doctor charges $100 for a visit, but your insurance plan pays the doctor only $70. You receive a bill for $30. In this case, it is illegal (in most states). Some people who don’t know it is illegal, however, pay the bill, fearing bill collectors and credit score problems.
Balance billing may also occur if you choose to have a procedure, such as cosmetic surgery, that is not covered by your health plan. It may also happen if you have an out-of-network health service that your health plan has not approved beforehand.
Finally, this problem may occur when a doctor does not have a contract with your health insurance plan but works at a hospital that does have a contract with your plan. You may receive extra billing from doctors such as radiologists, anesthesiologists, pathologists, emergency room doctors, neonatologists, or assistant surgeons.
You need to find out before joining a plan or having a health procedure if your healthcare providers – including doctors, hospitals, clinics, and other facilities – are part of your health plan. This is important. In most states, healthcare providers that have contracts with your insurance are not allowed to send you a balance bill if you participate in certain types of plans, such as an HMO but less so with a PPO.
You can prevent surprise bills. Find out in advance how much extra you might have to pay, especially if you’re going into the hospital for, say, an operation, and know that a member of your healthcare team is not part of your healthcare plan. Request, in advance, estimates of charges from providers and facilities and an estimate of how much of the bill your health insurance intends to pay.
If you know you’re going to be stuck with a balance bill, you might be able to get your health plan to work out a discounted payment for your health service before you go into the hospital. Sometimes you can negotiate payment options in advance directly with the doctor who is not in your network.
The best way to prevent a surprise bill is to know your health plan’s rules up front. Read your insurance policy, especially the summary of benefits and coverage, which will describe in detail what your plan covers. Make sure you pay attention to what your plan does not cover.
Know the hospitals in your network. Don’t just ask if your surgeon takes your insurance; find out who else is involved in your care and if they are in your network.
After your surgery or visit to your provider, your insurance company should send you an explanation of benefits. It will give you a heads up that a bill you didn’t think you’d receive, before you had surgery, might be on its way. Once your bill arrives, call your insurance company to see if any of the charges are errors.
If you do find a surprise out-of-network bill in your mail, and you get nowhere with your insurance company, Community Health Advocates, a free and confidential counseling service, may be able to help.
June 15, 2015
Christopher Nystuen, MD, MBA