Balance billing by medical providers has become a controversial subject and in many states is now either regulated or prohibited. This doesn’t seem to stop balance billing completely as people who receive the bills may not realize their rights under the law and pay more than they should.

What is Balance Billing?

Balance billing, also called surprise billing, occurs when a medical provider, i.e. a hospital, surgeon, anesthetist or EMS service, bills for a medical service provided when it does not have a formal arrangement with your own insurance provider. There are many advantages for medical providers to offer discounted prices for their services as part of an agreement with a particular insurer.

The advantage to the medical provider is that it obtains a readier stream of business because of its arrangement with that insurer. The greater number of patients offsets the fact that it receives less revenue and therefore less profit per patient.

A provider that is off-network may still be used to treat a patient who believes that he/she has chosen in-network providers and then attempts to extract the ‘balance’ between the discounted price and the full price when providing services to a patient.

For example, say you have been injured in a car accident in a ‘no-fault’ state. Unless your injuries are particularly severe, you are expected to claim from your own PIP insurer. However, while you may think that you are choosing providers that are networked to your insurer, you have no control over every stage in your treatment.

For example, if an off-network anesthetist is called into a procedure at the in-network hospital, you could find you are billed for the difference in the cost of supplying that service between the discounted cost and the full cost.

This might amount to double the discounted amount and the balance is expected to be paid by you! This would be ‘balance billing’ and it may turn up as a surprise as you assumed that you had chosen providers who were all tied in to your insurer.

Another reason why you may receive balance billing is if you have an auto accident a long way from home and need treatment as soon as possible.

In other words, it would not have been safe for you to be transported back to your own home town or city where the medical providers would have most likely been networked to your insurer. You would be more likely to have treatment by off-network providers.

Despite the fact that you think you were ‘covered’ by your insurer, you still receive balance billing by all the providers who have provided you with a service, whether this was to transport you to a hospital, operate on you, provide you with drugs or post operative care.

Balance Billing and Personal Injury Claims

Apart from balance billing turning up as a nasty surprise when making a claim against your own health insurance provider, the practice also appears when making a claim after an auto accident injury when there is an at-fault driver whose insurance company is subject to a personal injury claim.

Medical providers may discover that there is a possibility of a personal injury claim and attempt to impose a lien on the at-fault driver’s insurer who they do not have an arrangement with and attempt to obtain a far higher payment for their services when the settlement is paid out than if they billed the injured victim’s own insurer.

The medical providers may also impose a lien on the personal injury attorney who is representing the injured vehicle accident victim.

Is Balance Billing Legal?

The legality of balance billing varies considerably from one state to another and it is certainly worth getting legal advice if you get a bill that you didn’t expect from a medical provider after being treated for injuries caused by an auto accident.

In some states, balance billing is entirely prohibited. In others, it is regulated, i.e. permitted in certain circumstances but prohibited in others, while other states again have not made any laws about the practice.

21 states have some sort of legislation which regulates balance billing. California, Connecticut, Florida, Illinois, Maryland and New York all ban balance billing altogether. Some states provide protection for patients who have received balance billing without actually making it illegal.

Some states like Montana with low population density have made it impossible for off-network air ambulances to charge full rates for patients they transport. Montana’s law is understandable in a state where it would be hard for a seriously injured car accident victim to quibble over who gets them to hospital when they could be many hundreds of miles from the nearest hospital.

Balance billing is more than just a surprise. It can amount to a huge difference in expenses which can become a significant financial burden on the injured person.

The whole subject is quite complex from a legal standpoint and you are advised to get professional advice from a Medleague billing / coding review expert before paying any extra bills or agreeing to pay any extra bills for medical services that you or a client of yours has received.

Med League provides medical expert witnesses to trial lawyers. Please call us at (908)788-8227 or contact us today to discuss your next case.