Introduction

Healthcare billing can be complex, and many patients are often confused when they receive unexpected medical bills. One such billing practice is balance billing, which occurs when a healthcare provider bills a patient for the difference between the provider’s charge and the amount covered by the patient’s insurance. While balance billing is legal in some cases, there are federal and state regulations that protect patients from unfair charges.

Understanding how balance billing works, when it is allowed, and what rights patients have can help individuals navigate their medical expenses and avoid unexpected financial burdens. This article provides a comprehensive guide to balance billing, its legality, protections under the No Surprises Act, and steps patients can take to protect themselves.

What is Balance Billing?

Balance billing happens when a healthcare provider charges a patient for the remaining balance after an insurance company pays its share of the bill. This typically occurs when a provider is out-of-network, meaning they do not have a contract with the patient’s insurance plan.

✔ Example of Balance Billing:
A patient undergoes an MRI scan at an out-of-network imaging center. The center charges $1,500, but the patient’s insurance only covers $1,000. The provider then bills the patient for the remaining $500—this is balance billing.

How Does Balance Billing Work?

1. In-Network vs. Out-of-Network Providers

• In-Network Providers: Have agreed-upon rates with insurance companies, and patients are only responsible for copays, deductibles, and coinsurance.
• Out-of-Network Providers: Set their own prices and may charge the patient the difference between what insurance pays and the total bill.

2. When is Balance Billing Allowed?

Balance billing is only permitted when:
✔ A provider is not in-network with the patient’s insurance.
✔ The service is not covered by the patient’s health plan.
✔ The patient agrees in writing to pay out-of-network charges before receiving care.

3. When is Balance Billing Illegal?

Balance billing is not allowed in the following situations:
❌ Emergency care – Patients cannot be balance billed for out-of-network emergency services.
❌ Certain out-of-network services at in-network facilities – This includes anesthesiology, radiology, pathology, and lab tests received at an in-network hospital.
❌ Medicare and Medicaid patients – Federal law prohibits balance billing for Medicare and Medicaid beneficiaries.

The No Surprises Act and Patient Protection:

The No Surprises Act (NSA), which went into effect on January 1, 2022, provides protections against balance billing in specific scenarios.

1. Key Protections Under the No Surprises Act:

✔ No balance billing for emergency services – Patients cannot be charged extra for out-of-network emergency care.
✔ Protection for services at in-network facilities – If a patient visits an in-network hospital but receives care from an out-of-network specialist, they cannot be balance billed.
✔ Advance cost estimates – Patients must receive a good faith estimate of medical costs before treatment.
✔ Independent dispute resolution – If providers and insurers disagree on payments, they must use arbitration, not bill the patient.

Example: A patient has surgery at an in-network hospital, but the anesthesiologist is out-of-network. Under the No Surprises Act, the anesthesiologist cannot send a balance bill to the patient.

Patient Rights and How to Handle Balance Billing

1. Know Your Insurance Plan

Patients should:
✔ Check if their provider is in-network before scheduling an appointment.
✔ Understand their benefits and coverage limits.
✔ Ask for an estimate of out-of-pocket costs before receiving care.

2. Review Medical Bills for Errors

Balance billing mistakes happen due to:
❌ Incorrect coding – Wrong medical billing codes can result in overcharges.
❌ Duplicate charges – A patient may be billed twice for the same service.
❌ Insurance processing errors – The insurer might have applied the wrong coverage rules.

✔ Tip: Always request an itemized bill and compare it with insurance explanation of benefits (EOB).

3. Appeal the Balance Bill

If a patient receives a balance bill they believe is incorrect or unfair, they can:
✔ Contact the provider – Ask for a breakdown of charges and negotiate.
✔ Call the insurance company – Verify coverage and request reconsideration.
✔ File an appeal – Submit a formal dispute with the insurance company or state regulators.

Example: A patient receives a $2,000 balance bill for an emergency room visit. Since emergency care is protected under the No Surprises Act, they contact their state insurance commissioner and get the bill dismissed.

4. Use State Consumer Protection Laws

Some states offer stronger protections against balance billing than federal law.

✔ Examples of States with Additional Protections:

• California – No balance billing for non-emergency out-of-network services.
• New York – Patients can use independent dispute resolution to contest unfair bills.
• Texas – Providers cannot balance bill state-regulated insurance plans.

✔ Tip: Patients can visit their state’s Department of Insurance website for specific balance billing laws.

5. Negotiate Medical Bills

If balance billing is allowed, patients can:
✔ Ask for a payment plan – Many providers offer installment options.
✔ Request a discounted cash price – Some hospitals reduce costs for uninsured patients.
✔ Use medical billing advocacy services – Professionals can negotiate bills on behalf of patients.

Example: A patient receives a $5,000 bill for out-of-network care. They negotiate a 50% reduction by offering a lump-sum payment.

Frequently Asked Questions (FAQs)

1. Can I be balance billed for telehealth services?

✔ It depends on the state and insurance coverage. Some telehealth services are protected under the No Surprises Act, while others are not.

2. What should I do if I’m balance billed illegally?

✔ Contact your insurance company immediately.
✔ File a complaint with the Consumer Financial Protection Bureau (CFPB) or your state insurance department.

3. Are there any protections for self-insured employer plans?

✔ Yes. The No Surprises Act applies to self-insured (ERISA) plans, covering balance billing protections for emergency and in-network facility services.

4. Can my doctor ask me to waive my rights against balance billing?

❌ No. Providers cannot force patients to waive their rights in emergency situations.

Conclusion:

Balance billing can be a financial burden for many patients, but federal and state laws provide important protections. The No Surprises Act has significantly reduced unfair billing practices, particularly for emergency care and in-network facility services.

Key Takeaways:

✔ Know when balance billing is legal and when it isn’t.
✔ Use patient rights under the No Surprises Act to dispute illegal charges.
✔ Review bills carefully and negotiate if needed.
✔ File complaints and seek legal assistance if balance billing protections are violated.

By understanding how balance billing works and what steps to take, patients can avoid unexpected medical costs and ensure fair healthcare billing practices.