Balance Billing

The practice of billing a patient for the difference between the provider's billed charge and the amount the insurance plan paid or allowed.

Balance billing is when you bill a patient for the difference between your full charge and what the payer paid. As an in-network participating provider, balance billing is generally prohibited by your contract. You agreed to accept the payer's allowed amount as payment in full, so you cannot bill the patient for the difference. For example, if you charge $300 for a service and the payer's allowed amount is $180, you write off the $120 difference. You can collect the patient's copay, deductible, and coinsurance from the $180 allowed amount, but you cannot send the patient a bill for the $120. Out-of-network balance billing is a different story and has become heavily regulated. The No Surprises Act, effective January 2022, prohibits surprise balance billing in several situations: emergency services regardless of network status, non-emergency services provided at an in-network facility by an out-of-network provider (like an anesthesiologist or pathologist the patient did not choose), and air ambulance services. In these protected situations, the patient pays only their in-network cost-sharing amount, and you as the out-of-network provider must work out the payment with the payer through negotiation or the independent dispute resolution process. For credentialing, understanding balance billing rules is important because your participation agreement specifies exactly what you can and cannot collect from patients. Violating the balance billing prohibition in your contract can result in contract termination, payer sanctions, and patient complaints to the state insurance department. Many states have their own balance billing protections that go beyond the federal No Surprises Act. Some states had surprise billing laws years before the federal law was enacted. Make sure you understand both federal and state rules for your practice locations. The bottom line: if you are in-network, you cannot balance bill. If you are out-of-network, the rules depend on the situation, the state, and whether the No Surprises Act applies. When in doubt, do not balance bill and let the billing team sort it out.