How to Get Paid on the Balance of the Bill

What Patients and Providers Need to Know about Balance Billing:

For many reasons Balance Billing is a problem for emergency medicine practice, for example the ER may fall under one contract, but the doctor(s) covering the ER my be under another set of contracts or under no contract with that patient's health plan.  So what should a ER Practice group do?  They are certainly entitled to be compensated, but to what extent?   The short answer to this is you will need a billing solutions expert and a legal advocate to go after the insurance companies.   

What is balance billing?

Balance billing is a practice where a health care provider bills a patient for the difference between their charge amount and any amounts paid by the patient's insurer or applied to a patient's deductible, coinsurance, or copay. It is important to note that billing a patient for amounts applied to their deductible, coinsurance, or copay is not considered balance billing. When a patient and a health insurance company both pay for health care expenses, it's called cost sharing. Deductibles, coinsurance, and copays are all examples of cost sharing and these amounts are pre-determined per a patient's benefit plan.

  • Example: A healthcare provider bills $250 to an insurance for a service. The insurance pays $100 and applies $50 to patient responsibility for the deductible, coinsurance or copay. This leaves a remaining balance of $100. If the healthcare provider bills the patient for the remaining $100 balance this would be considered balance billing.  

Is balance billing legal?

In some circumstances it is and in some it is not.  Healthcare providers that are in-network have agreed to accept the insurance plan's negotiated fees. Balance billing would not be permitted under an in-network agreement because the healthcare provider has agreed to accept the negotiated fees as payment in full plus any applicable deductible, coinsurance, or copay. In the above example this would mean that the healthcare provider would accept the $100 plus the $50 (deductible, coinsurance, or copay amount) as payment in full and would write off the remaining $200 balance. In this situation, balance billing is not legal.

Healthcare providers that are out-of-network have not agreed to accept the insurance plan's negotiated fees and could balance bill the patient. Without a signed agreement between the healthcare provider and the insurance plan, the healthcare provider is not limited in what they may bill the patient and may seek to hold the patient responsible for any amounts not paid by the insurance plan. In this situation balance billing is legal.

Can you waive copays and deductibles?

It is unlawful to routinely waive copays, coinsurance, and deductibles. Providers are at risk of violating Federal Anti-Kickback Statutes, Federal False Claims Act, and state laws. The only legitimate reason to waive a copay or deductible is the patient's genuine financial hardship.

Effective 2021 the Federal Government has enacted “surprise bill” legislation, to provide relief from the widespread practice of balance billing for out-of-network services. In Florida similar legislation was enacted in 2016.  What does that mean?

See Florida Statute Section 627.64194. A surprise bill is when a member receives services from an out-of-network provider at an in-network hospital or other center and receives a bill for those services that they were not expecting. Florida has implemented surprise billing laws that may impact reimbursement for some out-of-network health care services, by requiring new disclosures from providers regarding their plan participation status. They have also added new rules for health plans regarding networks and reimbursement for out-of-network services.

Several states, including Florida and California, have laws on the books that provide some amount of consumer protection from balance and surprise bills in emergency departments and in-network hospitals. Some statutory schemes are about preventing surprise billing: for example, California, and Florida. Patients should only receive bills when their health insurance applies patient responsibility due for a deductible, coinsurance, or copay.

Important Terms To Understand in Balance Billing:

Copay: A copay is a set amount you pay whenever you use a particular type of healthcare service.

Coinsurance: With coinsurance, you pay a percentage of the cost of a healthcare service—usually after you've met your deductible. You continue paying coinsurance until you've met your plan's maximum out of pocket for the year. 

Deductible: A deductible is a fixed amount you have to pay each year toward the cost of your health care bills before your health insurance coverage kicks in fully and begins to pay for you.

In-Network: In-network refers to providers or health care facilities that are part of a health plan's network of providers and has a signed contract agreeing to accept the health insurance plan's negotiated fees.

Out-of-Network: This phrase usually refers to physicians, hospitals, or other healthcare providers who do not participate in an insurer's provider network. This means that the provider has not signed a contract to accept the health insurance plan's negotiated fees.

Usual and Customary: A reasonable and customary fee is the amount of money that a particular health insurance company (or self-insured health plan) determines is the normal or acceptable range of payment for a specific health-related service or medical procedure.

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