Health insurance is necessary if you want to avoid financial ruin in the case of a medical emergency. With that said, health insurance premiums are not cheap. According to the Kaiser Family Foundation Employer Health Benefits Survey in 2019, the annual premium for health insurance for a family of four is $20,576 on average. Now, while this amount is rather high in and of itself, you can end up paying more money than that on services from healthcare providers. One source of these additional costs is balance billing. If you’re currently thinking, “what is balance billing?” this article will tell you all about it.
Balance billing can significantly impact your finances if you’re not careful. This is also because these types of bills come as a surprise to patients, and you may have to pay the entirety of the bill out of your pocket. With that said, you can effectively deal with balance billing or prevent it altogether. This article discusses what balance billing is, what can pose a risk for it, and how you can deal with it.
What Is Balance Billing?
Balance billing is a process in which a healthcare provider charges one of their patients the excess amount that is not covered by the patient’s insurer. This type of billing is commonly referred to as surprise billing because this medical bill can be an unwelcome surprise for patients.
With that said, many employers ensure that their employees are protected against surprise billing. However, it’s still important for you to understand that there are numerous risks that come with this type of billing (more on this later).
Balance billing will only occur when you owe the balance on a medical bill after your insurer has covered their portion of the medical bill, and after you’ve paid all deductibles and coinsurance. Balance billing can or cannot be legal, depending on the balance billing laws in the state you’re situated in and the specifics of the circumstances. Therefore, it’s crucial that you determine whether this type of billing is legal in your case.
Your healthcare provider will most likely charge you for the balance that your insurer didn’t cover in the absence of the following situations.
- The laws in your state prohibit the process of balance billing
- Your healthcare provider explicitly agrees that they will not include balance billing in the transaction
Always make sure to check if your healthcare provider is included in your insurer’s network if you want to avoid the risk of balance billing.
How Does Balance Billing Work?
Insurance policies often determine which healthcare facilities and providers are included in their network. Therefore, when you receive services from covered healthcare facilities, your insurer will cover the costs of those services. However, if you receive services from a healthcare facility or provider that’s not included in your insurer’s provider network, the provider from that facility charge you an amount of their choosing. In this case, the healthcare service provider will not be bound to any specific rates that are in accordance with your health plan.
Some insurance companies also offer to pay a portion of the costs when you receive healthcare services from a provider that’s out of their network. This can help soften the financial hit on you, but you may still end up paying a lot. This is because your insurer will not pay a percentage of the exact amount you’ve been billed. Instead, your insurer will look at existing data on the average costs for the healthcare service you received and pay a percentage of that amount. Therefore, if the amount they determine is significantly lower than the amount you were billed, you can expect to pay a lot to cover the surprise billing. This is because you, the patient, will have to pay the balance.
What Can Pose a Risk of Balance Billing?
A considerable risk that comes with balance billing is that it can significantly set you back on your finances, especially if your medical bill is high. That said, there are some situations in which balance billing tends to occur. Therefore, it’s important that you’re aware of these situations so that you know how to fight balance billing effectively. Here are some situations that can increase the risk of balance billing. You must keep these situations in mind if you want to prevent yourself from having to deal with surprise billing.
Receiving Care from an Out-of-Network Provider
One common reason for balance billing is when a healthcare provider that’s out of your insurer’s network operates at a facility that’s in their network.
Often, patients visit in-network facilities for services with the expectation that their healthcare providers will accept their insurance. Unfortunately, it doesn’t always work that way. In such cases, the patient may learn that a provider doesn’t accept their insurance after they receive the bill. Therefore, they will then have to bear the cost of that bill if their employer doesn’t provide them with some form of protection against surprise billing.
Consider this example: your healthcare provider asks you to get an x-ray done, but you go to a radiologist that’s not included in your insurer’s network. Therefore, in that case, you’ll have to pay for the radiologist’s services out of pocket.
Balance billing can occur when you receive medical care from a hospital or healthcare provider that’s not included in your health plan’s network. So, make sure that you check if a certain healthcare provider is included in your health plan’s network before you receive any services from them.
When a Healthcare Provider Doesn’t Accept Medicare Payments as Full Payment
Balance billing can occur when a patient accepts services from a healthcare provider that doesn’t accept Medicare payments as full payment. For those who don’t know, Medicare is a federal health insurance program for a certain portion of the population in the United States. People eligible for this insurance include:
- Those who are 65 years old or more
- Young people with disabilities
- Those with End-Stage Renal Disease (ESRD) – this is when a patient has permanent kidney failure and requires dialysis or a transplant
So, if you plan on receiving services from a provider that doesn’t accept Medicare, you’ll be responsible for paying the medical bill in full.
There are some cases in which a healthcare provider accepts Medicare but doesn’t accept assignments with Medicare. Therefore, if you’re using Medicare for health insurance, you may have to pay up to 15% extra of Medicare’s allowable charge in that case. To add to that, you’ll also have to pay your regular coinsurance payments and deductibles.
How to Fight Balance Billing in an Unexpected Case
There’s no doubt that balance billing can hurt your finances when you don’t expect it. With that said, there are some steps you can follow to ensure that you can effectively deal with balance billing. Surprise billing can become a significant problem for patients who suffer chronic illnesses because medical bills can keep adding up. Therefore, it’s important to know how to fight balance billing, and here’s how.
Determine If the Balance Bill is Legitimate and Correct
If you find a medical bill due to balance billing in your mail, you must first determine if this type of billing is legitimate and legal according to the balance billing laws in your state. It’s possible that your healthcare provider sent you the balance bill by mistake. This is more likely to be the case if you checked if the healthcare provider was included in your insurer’s network before you received their services. If you suspect a mistake, make sure to get in touch with your healthcare provider to clear out the confusion. Therefore, you should make it a habit to check if a specific healthcare provider is included in your insurer’s network before seeing them.
Contact the Insurance Department in Your State to Determine Your Options
If your balance bill is legitimate and correct, you must determine the source of the problem. In some cases, patients are guilty of oversight and end up seeing an out-of-network provider. If you’re guilty of this oversight, you must contact the insurance department in your state and confirm if there is any consumer protection that can provide you with some coverage in this situation. There’s a chance that they may be able to help you if you were unaware that the healthcare provider was not in your insurer’s network and the provider works at a facility that’s in the network.
Try to Negotiate with Your Healthcare Provider
If you’re unable to find a solution after going through the steps mentioned above, you must try and negotiate with your healthcare provider for a reduced bill. You’ll still have to pay for the services they provided you, but the overall financial hit may be lower. You may be able to achieve this by paying a percentage of the balance bill upfront. Consequently, the healthcare provider may agree to a payment plan.
Consider Hiring a Benefits Consultant
If you’re struggling to find an effective solution for balance billing, you can consider hiring a benefits consultant to help you. They can help you lower the chances of receiving surprise bills in the future as well. A benefits consultant is a professional who advises their clients about various types of insurance, including health insurance, advising businesses on employee benefits, and more. Therefore, a benefits consultant possesses knowledge and expertise about insurers and balance billing laws, among other laws. This way, they can provide you with options that you may not have been able to opt for otherwise.
Benefits consultants also help their clients choose, purchase, and administer benefits. Therefore, a professional consultant offers you valuable advice about balance billing that can help you with making your decision on the matter. As mentioned earlier, you can also use benefits consultants’ expertise to select other benefits such as insurance (and the coverages in the policy) in the future. There are many different types of health insurance along with different coverages. So, make sure that you’re aware of what your needs are if you’re planning on changing your policy.
Make Sure Your Benefits Consultant is Knowledgeable and Experienced
It’s crucial that you work with a knowledgeable benefits consultant. They should be well-versed in insurance, especially health insurance. Your consultant should also have significant knowledge of laws regarding balance billing. This way, you’ll have a better chance of making decisions regarding this process.
In addition to acknowledgeable benefits consultant, you should work with an experienced one. Read up on potential benefits consultants and read their clients’ reviews on the quality of their work. The consultant should have a good track record of providing valuable guidance and staying updated with laws and regulations regarding insurance.
Is Balance/Surprise Billing Legal?
There’s no definitive answer if balance billing is legal or not. This is because there are various factors that can affect that. Balance billing is legal if you visit a healthcare provider that’s not included in your insurer’s network, and if there are no balance billing laws that prohibit the practice in your state.
Balance billing is also legal if you opt for certain services that your health insurance policy doesn’t cover. In this case, it won’t matter even if the healthcare provider that provides those services are included in your insurance company’s network.
Last Few Words on Balance Billing
While balance billing is definitely a problem, it can be avoided with attention to detail and by staying updated with balance billing laws. If you do end up receiving a balance bill, don’t worry. Just make sure to follow the steps mentioned in this article to deal with them. It can also help to hire a benefits consultant to help you fight balance billing. In addition to that, they can also guide you on what coverages you should include in your insurance policy so that you don’t have to deal with balance billing in the future.
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