Balance billing: Will you owe more than expected for your medical care?

Mary Lou Jay

A visit to the hospital emergency room can be painful. But you may experience a different kind of discomfort a couple weeks down the road when, despite the payments made by your health insurance, you receive an additional bill. This practice is called balance billing.

Most people with health insurance are part of either preferred provider networks (PPOs) or health maintenance organizations (HMOs). Under these plans, insurers contract with physicians to provide treatments at certain set fees. These are in-network providers. Doctors who don't sign such agreements are considered out-of-network.

The fees that an in-network health care provider agrees to accept for insured patients are lower than their normal fees. In effect, you get a discount because you're a member of the insurance plan. In-network providers agree to accept the insurance company's payment as their complete fee, but out-of-network providers may bill you for the difference between the insurance company's payment and their usual fee. This, according to the Texas Department of Insurance, is balance billing (not to be mistaken for the co-pays and deductibles you pay under your insurance plan).

In-network providers are not allowed to balance-bill patients in most states. If an in-network physician or hospital sends you a bill, you should report it to your insurance company.

But the situation is different with non-network physicians. Because they have not signed an agreement with your insurance company, they are not required to settle for the payment that your insurer offers. If their fee is $100 for all patients, insured and uninsured, for a particular procedure and your insurance company pays only $60, you should expect to make up the difference.

Balance billing is further complicated in hospital and emergency situations, according to the California HealthCare Foundation. Patients who go to an in-network hospital for treatment may find they're being treated by staff physicians who are not in their insurance company's network. This could leave patients liable for substantial balance billing charges. In addition, patients suffering a medical emergency like a heart attack want to go to the nearest hospital, which may not be in-network. They could be balance-billed for any charges above what their insurance will pay.

The Texas Department of Insurance recommends that patients who don't want to be balance-billed stick with in-network physicians and facilities. If you can, call the health care provider in advance to make sure every aspect of the procedure will be conducted by in-network doctors. If your treatment requires you to use an out-of-network provider (because there are no in-network providers in your area), contact your health insurance company -- your insurer may be able to negotiate terms with the provider.

If you still get surprised by unexpected charges, work out payment options with your insurance company. Try mediation if all other efforts fail. Patients who feel that they've been unfairly treated through balance billing also can complain to their state insurance department.