Surprise medical bill? Here’s everything you need to know about balance billing
In an ideal world, insurance companies and doctors would work together to let you know the exact cost of a procedure before it takes place, and you’d never be left with questions about your medical bills.
In reality, many Americans receive high, unexpected medical bills. These "surprise medical bills" can happen in many situations:
In an emergency. Even if a patient rides in an ambulance that is in-network, and then goes to an in-network hospital, emergency room doctors could be out-of-network, according to researchers writing for Fortune. (In some emergency situations, you might not even have time to determine if the doctor or hospital you’re going to are in-network.)
Getting unexpected out-of-network care during a procedure or treatment. Patients may "go to an in-network hospital or clinic to be treated by an in-network surgeon or other physician, but wind up receiving care (often without their knowledge) from an anesthesiologist, pathologist, radiologist or other specialist who’s not in the network," according to the Los Angeles Times.
When you don't have other options. According to Brookings Institute, surprise bills might come “from providers (physicians, hospitals, outpatient facilities, laboratories, etc.) that patients reasonably assumed would be in-network, but actually are out-of-network" or "when patients have no real choice over the network status of their provider."
If you think that you are being seen by an in-network doctor and that your insurance will be covering a portion of your bill, you may be surprised to find out that an out-of-network doctor gave you care and is now looking to recoup the rest of the balance.
This is called balance billing. It’s an extremely confusing situation to navigate, but below you’ll find a detailed overview of what to do if you think you’re being balance billed.
In this post:
- What is balance billing, exactly?
- How to tell if you’re being balance billed
- Your options if you get balance billed
- Why is balance billing happening and when will it end?
First things first: what is balance billing?
When you get in-network care, it means that your insurance company and your in-network doctor have negotiated a network rate (or “allowed amount”) for the procedure. Your insurance will pay a portion of that network rate depending on your plan (deductible, co-pay, co-insurance), and you’ll be held accountable for the rest. Read more about the negotiated network rate and how your insurance plan affects your out-of-pocket costs.
But if you get out-of-network care, the situation is different. According to NerdWallet, out-of-network doctors are “not held to the same contractual requirements because they’ve chosen not to be included as in-network providers. In the absence of state-mandated limitations, they are free to collect up to the amount billed. Your health insurance may only “allow” and pay up to a certain amount of charges, and any remaining balance beyond the paid amount will be left for you to pay — hence the term ‘balance billing.’”
Before you kiss goodbye to your vacation savings, know that you do have options for either getting your bill corrected or lowered.
Balance billing is often not obvious, which is why, according to a Consumer Reports survey, 57% of patients who were balance billed within the last two years paid in full because they didn’t know their rights. In fact, they probably didn’t even know that they were balance billed.
This happens because your medical bill won’t actually say “balance billing.” It will, however, say things like “out-of-network doctor.” This language is the biggest tip-off that you’ve been balance billed and will let you know that it’s time to take action. It’s important to review every medical bill you receive, so you don’t end up overpaying.
Compare your Explanation of Benefits with an itemized bill
In the case that you get balance billed, comparing your Explanation of Benefits (EOB) with an itemized bill from your doctor can give you some insight into how this could have happened. An EOB is sent by your health insurance company and explains:
- The amount charged by the doctor
- The amount paid to your doctor
- Covered and uncovered charges under your plan
- The amount you’re responsible for
When you’re comparing your EOB with your medical bill, check for the following:
- Out-of-network care
- Duplicate charges
- Incorrect service dates
- Incorrect quantities of medication or services
- Upcoding (you can read more about this here)
- Billing for treatments you didn’t receive
If you spot any discrepancies, this can clue you into why you received a higher bill than you anticipated. When you call your doctor and/or insurance, this can help you get your bill lowered or corrected.
On all EOBs, there is a phone number to call if you have questions. Don’t hesitate to use this if you’re having trouble understanding the explanation—it’s your right as a patient to fully understand what you’re paying for.
Negotiate the charges with your doctor’s office or hospital
If you’ve been surprised by a medical bill, the first thing to do after you review your EOB is to call your doctor’s office or hospital and speak with someone in billing.
While it’s not guaranteed, some doctors may lower your bill or offer a discount. Aside from bringing up any discrepancies you found between your EOB and medical bill, some questions you can ask your doctor are:
“Do I qualify for any kind of discount?” Some doctors may provide a small discount for paying the bill over the phone or online. They may even offer a charity care program that gives you a more hefty percentage off your bill.
“Do you offer interest-free payment plans?” While having to pay the full balance is not ideal, it can help to pay it over time. Be sure to ask for an interest-free plan and get the longest terms possible. Paying a large bill over 24 months will give you a lower monthly payment than paying over 6 months.
“If I pay 40% of my bill right now, can you write off the rest?” Sometimes doctors will be willing to settle your payment if you can pay some of it up-front. This is up to the discretion of your doctor, but it’s worth asking.
Appeal the charges with your insurance company
If you tried to negotiate with your doctor’s office and didn’t get anywhere, don’t get discouraged. Your next step is to appeal the bill with your health insurance company.
If you did find a disparity on your EOB, you’ll want to mention this first. If you didn’t, you can ask the same questions you asked your doctor’s office. In the case that your insurance company doesn’t budge on your bill, you have the option to appeal in writing. Ask the person you speak with at your insurance company for the name and address of the person you need to send an appeal to.
Getting balance billed can be frustrating, but remember to be patient. Sometimes it takes time to get your bill lowered, especially if you’re going through your insurance company. Still, it pays to be persistent. Follow up every 2 weeks or so and ask the person you talk with to make a note on your account that there is an issue that is trying to be resolved. This can help you avoid your medical bill getting sent to collections, which can be an even bigger headache to deal with.
As we talked about earlier, the simple answer to why balance billing happens is that it depends—on your insurance, the hospital, and the doctor.
The more complicated answer is that more and more insurance companies are narrowing their networks and setting high prices for doctors that fall outside of that small margin of in-network doctors. There are a lot of problems with this and a lot of people who take issue with this practice. While patients aren’t thrilled with being balance billed, neither are out-of-network doctors, because they may not be fairly compensated by the insurance companies.
So, what’s being done about it? A few things, but it can often depend on what state you live in. For example:
The Centers for Medicare and Medicaid Services proposed changes to help address surprise medical bills for non-emergency services for individuals covered by qualified health plans offered through the Health Insurance Marketplace.
In California, Assembly Bill 72 is due to go into effect in July, and will remove patients from the balance billing dispute, which is really a matter between insurers and non-contracted health care providers. This will give relief to patients from being balance billed while also ensuring that non-contracted providers are paid fairly for their services.
New York is providing Independent Dispute Resolution Processes to patients who do get balance billed.
There are a few more recommendations for how insurers and doctors can take action against surprise medical bills by allowing protection on both state and federal levels, improving transparency around out-of-network charges, exempting patients who take the reasonable measures to (or have no reasonable opportunity to) avoid out-of-network billing from financial responsibility, and encouraging hospitals to increase in-network participation.
For further reading, check out ConsumersUnion.org, which has a map of state-by-state initiatives to help end surprise medical bills.