Balance Billing - Medical Bills You Shouldn't Pay

When an insurer reimburses a doctor, hospital, or lab less than the healthcare provider believes it is entitled to charge for a service provided, the healthcare provider will frequently bill the patient directly for items/services not covered. This all-too-common practice, known as balance billing, is often illegal. But many patients do not realize this, so they end up paying medical bills they should not have to pay, sometimes under threats from a collection agency.

While national statistics are not available, it is estimated that in California alone, policyholders received such improper bills totaling over a half billion dollars over a recent two year period. It was also found that 56 percent of these policyholders paid these bills.

Most frequently, balance billing occurs when healthcare providers in a managed-care network feel that the plan's insurer is either excessively discounting medical bills, or is taking too long to pay. 47 states, however, prohibit in-network providers from billing insured patients for more than the co-insurance or co-payments required by the plan. Many states also protect insured patients from balance billing by out-of-network doctors and hospitals in emergencies. Federal law bans balance billing Medicare patients.

The American Medical Association (AMA) has been lobbying Congress to allow balance billing within Medicare. In support of its bid to bill patients directly, the AMA points to declining reimbursements from the Medicare program and insists that doctors will behave ethically and not gauge the poor. But some managed-care administrators argue that healthcare providers currently have other options to press their claims.

In California, for instance, the state has set up an independent dispute-resolution system to make insurers accountable for paying claims promptly. But regulators in most states have been slow to take action in billing disputes. So this leaves patients not knowing where to turn and afraid to risk their credit standing by refusing to pay these improper bills.

If you receive a medical bill after your doctor or hospital has settled up with their insurance company, don't automatically assume that you must pay the bill. Such bills will often lump procedures together rather than itemizing the exact costs. If you suspect you've been billed for the "balance" of services rendered, and your healthcare provider does not offer a satisfactory explanation, you may wish to contact a medical malpractice attorney with expertise in this area of the law.