Balance Billing: When It's Illegal and How to Fight It
What is balance billing and is it legal?
Balance billing is when a provider bills you for the difference between their charge and what insurance paid. It is illegal for in-network providers, emergency services, and out-of-network providers at in-network facilities under the No Surprises Act. If your bill exceeds the 'Patient Responsibility' on your EOB, do not pay it.
You went to an in-network provider. Your insurance company paid their share. You paid your copay and deductible. You thought you were done. Then, weeks later, you get another bill from the provider for the difference between what they charged and what your insurance company paid. This practice is called balance billing, and while it is sometimes legal, it is often a violation of your provider's contract with your insurance company or a violation of federal law.
What is Balance Billing?
Balance billing is when a provider bills you for the difference between their full, undiscounted "chargemaster" rate and the lower, contracted rate that your insurance company has agreed to pay.
Example
- Your doctor charges $500 for an office visit
- Your insurance company has a contract setting the "allowed amount" at $200
- Your insurance company pays $160 of that allowed amount
- Your copay is $40
- The provider then sends you a bill for the remaining $300 ($500 - $200)
This $300 is the "balance," and the bill is a balance bill.
When is Balance Billing Illegal?
The legality of balance billing depends on your insurance plan and the provider's network status.
| Situation | Is Balance Billing Legal? | Why? |
|---|---|---|
| You saw an in-network provider | NO | The provider has a contract forbidding them from billing you for more than the agreed-upon contracted rate |
| Out-of-network provider for emergency care | NO | The No Surprises Act makes it illegal to balance bill for emergency services |
| Out-of-network provider at in-network facility | NO | The No Surprises Act protects you from surprise bills from out-of-network providers at in-network hospitals |
| You chose an out-of-network provider for non-emergency care | YES | The provider does not have a contract with your insurance company, so they are generally allowed to bill you for their full charges |
How to Fight an Illegal Balance Bill
Step-by-Step Action Plan
- 1.Compare Your Bill to Your EOB: Your EOB will show the "allowed amount" for the service. If the provider is billing you for more than your "patient responsibility" listed on the EOB, it is a balance bill.
- 2.Call the Provider's Billing Office: Say: "I have received your bill and have compared it to my EOB from my insurance company. Your contract with my insurer requires you to accept their payment as payment in full. This balance bill is a violation of your contract. Please adjust my bill to zero."
- 3.Call Your Insurance Company: If the provider will not back down, call your insurance company. They have a legal and contractual obligation to enforce their network agreements.
- 4.File a Formal Complaint: File with your state's Department of Insurance or the federal No Surprises Help Desk if the situation is covered by the No Surprises Act.