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Balance Billing

What is balance billing?

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.

How does balance billing impact healthcare?

Balance billing is a medical bill that a patient is responsible for paying, which increases the cost of receiving healthcare. While it can often be avoided by using only in-network providers, cases of surprise balance billing can be frustrating and expensive for patients.

To combat surprise balance billing and the strain it places on patients, the government passed the No Surprises Act in 2022, which bans surprise bills for most emergency services and out-of-network charges for additional services provided at an in-network facility by out-of-network providers.