Balance billing occurs when a provider bills a patient for the difference between the amount charged for services and the amount paid by the patient’s insurance.
In-network providers have agreed to accept the amount offered by the insurance company as payment in full for a specified service. As such, they are not allowed to balance bill a patient. However, balance billing is allowed in cases where a patient receives care from an out-of-network provider.
If the insurance plan covers out-of-network providers, they will pay them based on a reasonable and customary rate, which does not include the patient’s responsibility for the deductible and co-insurance. Anything above the reasonable and customary rate can then be billed as the difference.
One particular type of balance billing is surprise balance billing, which is when the patient receives a balance bill without knowing they saw an out-of-network provider. This can occur when the patient seeks care at an in-network facility but later finds out they were also treated by out-of-network medical providers. Surprise balance billing may also occur in cases of emergency care when the patient does not have a choice in where they go for care or whom they receive care from.