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What is Balance Billing (Health Care) and How Does It Impact You?
Definition & meaning
Balance billing occurs when a healthcare provider bills a patient for the difference between the total charges for a medical service and the amount covered by the patient's insurance plan. This practice usually happens when the provider believes that the insurance reimbursement does not fully cover the costs of the service rendered, often because the charges exceed the usual and customary rates for that service.
Table of content
Legal use & context
Balance billing is primarily relevant in the context of healthcare law and insurance practices. It is often encountered in managed care and Medicare settings. Legal issues can arise when patients are unexpectedly billed for significant amounts after receiving care, leading to disputes over what constitutes reasonable charges and insurance obligations. Users may benefit from legal forms and templates to address balance billing disputes effectively.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A patient receives treatment from a specialist who is not in their insurance network. The insurance pays $1,000 of the $2,500 billed. The specialist sends a bill to the patient for the remaining $1,500.
Example 2: A patient undergoing surgery at a hospital is billed for additional charges that their insurance does not cover, leading to a balance bill for the patient. (hypothetical example)
State-by-state differences
State
Balance Billing Regulations
California
Prohibits balance billing for emergency services and non-contracted providers in certain situations.
Texas
Has specific laws protecting patients from balance billing in emergency care and certain non-network situations.
New York
Limits balance billing for out-of-network providers in emergency situations and requires consent for non-emergency services.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Co-payment
A fixed amount a patient pays for a covered service, typically at the time of service.
Deductible
The amount a patient must pay out-of-pocket before insurance coverage begins.
Out-of-pocket maximum
The maximum amount a patient will pay for covered services in a plan year, after which insurance pays 100%.
Common misunderstandings
What to do if this term applies to you
If you receive a balance bill, first review your insurance policy to understand your coverage. Contact your insurance provider for clarification on what was covered and why. You may also wish to negotiate with the provider or seek assistance from a legal professional if the charges seem unreasonable. US Legal Forms offers templates that can help you draft letters or forms to address balance billing disputes effectively.
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