After visiting your doctor for treatment, you receive a bill in the mail. The statement says that your provider charged $100 but the allowed amount is only $60. Your provider is now trying to bill you for the remaining $40 not covered by your insurance. Are you required to pay the balance? The answer will depend on the balance billing laws in your state of residence.
What Is Balance Billing?
Balance billing, also referred to as surprise billing, is the difference between a healthcare provider’s charge and the amount allowed by the insurance company based on your policy. The practice of balance billing is a common occurrence with visiting providers who are out-of-network and therefore not subject to the terms and rates set by providers who are in-network. However, in-network providers can occasionally make errors and charge patients for balances that they do not legally owe. In some states, balance billing is actually illegal, meaning you do not have to pay the balance if you visit an in-network provider that takes your insurance and your policy covers the services rendered.
States with Comprehensive Protection
Balance billing is legal in some states and not in others. There are also certain situations in which balance billing is deemed illegal, such as when you have Medicare or Medicaid and you visit a provider that accepts Medicare or Medicaid assignment. In addition, balance billing is illegal if your hospital or doctor has a contract with your health plan but still bills you for more than the contract allows. To help determine whether or not you must legally pay the balance of a medical bill, you will want to look closely at the laws in your state regarding balance billing.
The following states offer comprehensive protection against balance billing practices.
In July 2017, a new law took effect in California that protects consumers who use in-network hospitals or other health facilities, from being charged with surprise bills after receiving care from a provider who has not contracted with their insurer. In these types of scenarios, the patient is only responsible for the copayment owed or other cost-sharing expenses that they would have normally owed if they were to see an in-network provider. This California law applies to both emergency and non-emergency services.
According to Connecticut’s law No. 15-146, which took effect on July 1, 2016, patients that receive surprise bills from their health insurer for out-of-network services that were performed at an in-network facility are only responsible to pay the co-payment, co-insurance, deductible, or other out-of-pocket expenses that would otherwise apply. A patient who sees an out-of-network provider for emergency services is only required to pay the equivalent of in-network costs. The law states that out-of-network hospitals, out-of-network providers practicing in in-network facilities, and transportation services are all protected against balance billing practices.
Florida law outlines a process in which healthcare providers and insurance companies are able to work out billing disputes without putting an additional financial strain on patients. If a patient in Florida is seen by an out-of-network provider at an in-network hospital, the law states that the patient is only responsible for paying the provider the in-network fee. It is then the responsibility of providers and insurance companies to negotiate the remainder of the fees. Congress is currently working on legislation that may change the way that balance billing is handled, that focuses on reducing the amount of power given to insurance companies.
Effective June 1, 2011, the Illinois Balance Billing Law brings relief to patients who receive services at an in-network hospital or ambulatory surgery center. The law states that out-of-network facility-based providers are prohibited from billing patients for expenses other than the deductible and copay that they would have normally paid if they had seen an in-network provider. Out-of-network providers must accept whatever fee he or she is able to negotiate with the insurance company and the patient is not involved in this process. If a provider is unable to negotiate an acceptable fee, the law allows for a binding arbitration process that is used to help resolve the matter.
Originally, balance billing protections in Maryland only applied to patients that were enrolled in HMOs. In 2010, these protections expanded to cover PPO enrollees. Today, Maryland prohibits healthcare providers from performing balance billing to HMO consumers for covered services such as emergency services. HMOs must also hold patients harmless for covered services that are provided by out-of-network providers and provide payments at a prescribed rate. PPO laws also grant protections to patients who assign benefits to their physicians. While balance billing sometimes still occurs in Maryland, it is far less prevalent than it used to be.
6. New Hampshire
In July 2018, the state of New Hampshire enacted a law that prevents out-of-network health providers that perform services in in-network hospitals or ambulatory surgical centers from sending balance bills to patients. The goal of this new law is to protect consumers by preventing healthcare providers and insurance companies from holding patients responsible for balance bill charges. If you have received care at an in-network hospital or surgical center in New Hampshire, the law prevents radiology, anesthesiology, pathology and emergency medicine providers, even those that are not in-network for your insurance plan, from charging any amount other than the standard co-pay, coinsurance or deductible.
7. New York
New York was the first state to enact a balance billing law that protects patients from the financial responsibility of surprise bills. The law went into effect on March 31, 2015, after a review of more than 2,000 complaints regarding surprise bills in which 90 percent were not for emergency services but rather for other in-hospital services. Under the New York balance billing law, patients are not required to pay out-of-network provider charges for out-of-network services that are higher than the patient’s in-network deductible, copayment, or coinsurance rate. There are certain scenarios in which an out-of-network bill may be considered a surprise, such as if the patient was treated by an out-of-network provider without giving consent to be treated or when no in-network provider is available at the time to provide care.
In March 2018, Oregon passed a law that protects citizens from having to pay surprise out-of-network medical bills from providers that were not chosen by the patient. This law also requires healthcare providers that are out-of-network to inform the patient of their increased financial responsibility.
After approximately two years of negotiations, Virginia recently passed legislation to end surprise medical billing in the state of Virginia. This means that providers and hospitals will no longer be able to charge patients for medical bills that their insurers will not cover. The bill states that a patient cannot be obligated to the difference when they seek services in an emergency room or when they need surgery. Instead, insurers will have to offer out-of-network providers the standard commercial rate for services. This amount is often close to or identical to what an in-network provider receives.
10. Other States
Other states in the U.S. are also adopting new laws to make balance billing illegal. In early 2020, Colorado, Texas, New Mexico and Washington, began enforcing balance billing laws. Some states also have a limited approach towards balance billing, including Arizona, Delaware, Indiana, Iowa, Maine, Massachusetts, Minnesota, Mississippi, Missouri, North Carolina, Pennsylvania, Rhode Island and Vermont.
Learn More About Balance Billing from BBG
Receiving a medical bill in the mail that you were not expecting can be a stressful experience. Depending on the circumstances of the debt, you may or may not be required to pay the bill in full. It is important to carefully review your healthcare policy and be aware of the laws in your state regarding balance billing. To learn more about balance billing, contact the experienced insurance brokers at the Business Benefits Group today.