How to Handle Balance Billing

stethoscope resting on stack of &100 bills
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Balance billing can surprise you with medical bills that are hundreds, thousands, or even tens of thousands of dollars more than expected.

If your doctor or hospital expects you to pay the balance remaining on the bill after you’ve paid your deductible, coinsurance, or copayment and your insurance company has paid what it’s obligated to pay, then you’re being balance billed.

Sometimes balance billing is legal, and sometimes it’s illegal.

How you handle it will depend on whether or not it’s a legal balance bill.

If You’re Being Balance Billed Illegally

Don't pay the balance-billed portion of the medical bill if you’re being balance-billed illegally. In some cases, illegal balance billing has severe, even criminal, penalties. You have several options for how to respond if you suspect you're being balance billed illegally:

  • Speak with the health care provider and discuss the situation. With this approach, you’re basically giving your provider the benefit of the doubt, approaching the issue as though it’s a simple billing error. Explain why you feel balance billing is prohibited in this case, and ask the provider to correct the billing error.
  • If your discussion with the provider doesn’t fix the problem, complain to your insurance company, Medicare, or Medicaid, whichever provides your coverage. Tell the insurance company you’re being balance-billed, and ask it to intervene on your behalf. If you have Medicare or Medicaid, contact the Center for Medicare and Medicaid Services.
  • In addition, you may complain to the regulating authority for the healthcare provider. In the case of a physician, this is likely your state’s Board of Medicine. Find contact information for each state’s Board of Medicine here. Get information on the regulatory authority for each state’s hospitals from the Empowered Patient Coalition. If you feel you’re not being treated fairly by your health insurer, complain to your state’s Department of Insurance.

    If You Know In Advance You’ll Be Legally Balance Billed

    First, try to prevent balance billing by staying in-network and making sure your insurance company covers the services you’re getting. If you’re having x-rays, MRIs, CT scans, or PET scans, make sure both the imaging facility and the radiologist who will read your scan are in-network. If you’re planning to have surgery, ask whether the anesthesiologists are in-network.

    If you know in advance that you’ll be using an out-of-network provider or a provider that doesn’t accept Medicare assignment, you have some options. However, none of them are easy and all require some negotiating.

    Ask for an estimate of the provider’s charges. Next, ask your insurer what they consider the reasonable and customary charge for this service to be. Getting an answer to this might be tough, but be persistent.

    Once you have estimates of what your provider will charge and what your insurance company will pay, you’ll know how far apart the numbers are and what your financial risk is. With this information, you can narrow the gap. There are only two ways to do this: get your provider to charge less or get your insurer to pay more.

    Ask the provider if he or she will accept your insurance company’s reasonable and customary rate as payment in full.

    If so, get the agreement in writing, including a no-balance-billing clause.

    If your provider won’t accept the reasonable and customary rate as payment in full, start working on your insurer. Ask your insurer to increase the amount they’re calling reasonable and customary for this particular case. Present a convincing argument by pointing out why your case is more complicated, difficult, or time-consuming to treat than the average case the insurer bases its reasonable and customary charge on.

    Another option is to ask your insurer to negotiate a single-case contract with your out-of-network provider for this specific service.

    Sometimes they can agree upon a single-case contract for the amount your insurer usually pays its in-network providers. Sometimes they’ll agree on a single-case contract at the discount rate your doctor accepts from the insurance companies she’s already in-network with. Or, sometimes they can agree on a single-case contract for a percentage of the provider’s billed charges. Whatever the agreement, make sure it includes a no-balance-billing clause.

    If all of these options fail, you can ask your insurer to cover this out-of-network care using your in-network coinsurance rate. While this won’t prevent balance billing, at least your insurer will be paying a higher percentage of the bill since your coinsurance for in-network care is lower than for out-of-network care.

    If you pursue this option, have a convincing argument as to why the insurer should treat this as in-network. For example, there are no local in-network surgeons experienced in your particular surgical procedure, or the complication rates of the in-network surgeons are significantly higher than those of your out-of-network surgeon.

    If You Don’t Discover the Problem Until After You’ve Received the Care

    Negotiating after-the-fact when you’ve gotten a legal balance bill is more difficult, but you still have options.

    You can negotiate the balance-billed portion with your provider. Remember, your provider wants to get paid and would prefer to get his or her money quickly and without having to pay a portion of it to a collection agency. This means a provider might agree to decrease the total amount billed to the discount rate that she receives from the insurance companies she’s in-network with, if you agree to pay your share immediately. Or, your provider might accept a portion of the remaining balance as payment in full if you agree to pay in cash immediately. Some will allow you to set up a payment plan.

    You can negotiate with your insurer. If your insurer has already paid the out-of-network rate on the reasonable and customary charge, you’ll have difficulty filing a formal appeal since the insurer didn’t actually deny your claim. It paid your claim, but at the out-of-network rate. Instead, request a reconsideration. You want your insurance company to reconsider the decision to cover this as out-of-network care, and instead cover it as in-network care. You’ll have more luck with this approach if you had a compelling medical or logistical reason for choosing an out-of-network provider.

    If you feel like you’ve been treated unfairly by your insurance company, follow your health plan’s internal complaint resolution process. You can get information about your insurer’s complaint resolution process in your benefits handbook or from your human resources department. If this doesn’t resolve the problem, you can complain to your state’s Department of Insurance. Find contact information for your Department of Insurance by clicking your state on this map.

    If your health plan is self-funded, meaning your employer is the entity actually paying the medical bills even though an insurance company may administer the plan, then your health plan may not fall under the jurisdiction of your state’s department of insurance. Self-funded plans usually fall under the jurisdiction of the Department of Labor’s Employee Benefit Services Administration. Get more information from the EBSA’s consumer assistance web page or by calling an EBSA benefits advisor at 1-866-444-3272.