What is balance billing and how can you avoid it?

Let's face it: No one likes receiving a medical bill in the mail. Even when you know it's coming, the sight of it still gives you chills.

One possible cause of the phenomenon of medical sticker shock is a practice known as balance billing. Adam Sacarny, an insurance and health care policy expert at the Columbia University Mailman School of Public Health, explained it to us.

“Balance billing is when your health insurer charges you a portion of the bill that your insurance plan did not allow. And that can only happen if you see an out-of-network provider.”

Imagine having trouble getting an appointment with an in-network specialist and going to an out-of-network provider. According to your insurance company, the treatment you receive should cost €500. Insurance agrees to pay 70% of those costs, or about $350.

But the specialist you saw asked for $1000. Now, instead of $150, you'll be charged $650: the balance between what insurance agreed to pay and what the provider actually charged.

Now you may be wondering: how can you prevent this?

Sacarny says it's best to make sure you go to in-network providers. He recommends always checking to see if the provider you want to visit is in-network before your appointment, especially if it's been a while since your last visit. You can do this via your insurer's website, or by calling the provider's office directly.

But what happens when you or a loved one experiences a medical emergency and don't have time to plan ahead?

Starting in January 2022, a federal law will protect patients from a specific type of balance billing called “surprise billing.”

“Surprise billing is a type of balance billing that happens when you are surprised by an out-of-network provider.” explains Sacarny. “If you receive services in an emergency department, those protections apply there.”

He said protection against unexpected billing may also apply in some non-emergency situations.

“They protect you from in-network services from physicians at in-network hospitals”

This may apply, for example, if you undergo a non-emergency operation in a hospital that is within the network. Under federal law, you can only be charged the in-network rate for the procedure, even if one of your surgeons is out-of-network.

But sometimes patients are charged incorrectly.

It's also important to note that these protections may not apply to all services. For example, an ambulance ride may not be secured.

Whether or not the protection applies to your situation, Sacarny says any patient can take steps to try to reduce their bill.

First, and most importantly, he says, don't just pay it.

“Once you pay the bill,” he explains, “it's going to be hard to get that money back. If it turns out that you are right, it will be more difficult to get your provider to the negotiating table.”

Contact your provider and tell them you plan to dispute the bill. Informing them of your intentions will ensure that your bill is not sent for collection while it is under dispute.

From there you can start negotiating with the provider. If you think your bill is a surprise bill, asking that question may be enough to get the additional fees waived.

There are fewer protections for other balance billing situations.

“But it may still make sense to challenge the law in some way,” Sacarny says.

That's because medical bills aren't always set in stone. You may be able to negotiate away some or all of the remaining billed charges.

Another option Sacarny suggests is to contact your insurance company and ask them to cover the bill as in-network services

And finally, he says, “the last thing you can do is possibly consider filing a complaint with your state regulator.”

Although taking this step will not automatically solve the problem, a complaint can be helpful in negotiating a lower bill.

You can find the contact information for your state's insurance and healthcare regulators online.

It's something to keep in mind when your next medical bill arrives in the mail.

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